SEC Form 10-Q filed by Impact BioMedical Inc.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
Commission file number
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Securities registered pursuant to Section 12(b) of the Act:
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As of May 12, 2025 there were shares of the registrant’s common stock, $ par value, outstanding.
IMPACT BIOMEDICAL, INC.
FORM 10-Q
TABLE OF CONTENTS
| 1 |
Impact BioMedical, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
| March 31, 2025 (unaudited) | December 31, 2024 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Inventory | ||||||||
| Current portion of notes receivable | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property, plant and equipment, net | ||||||||
| Notes receivable | ||||||||
| Other intangible assets, net | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses and deferred revenue | ||||||||
| Note payable, related party | ||||||||
| Total current liabilities | ||||||||
| Deferred tax liability, net | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 12) | ||||||||
| Stockholders’ equity | ||||||||
| Preferred stock, $ par value; shares authorized, shares issued and outstanding ( on December 31, 2024); Liquidation value $ | ||||||||
| Common stock, $ par value; shares authorized, shares issued and outstanding ( on December 31, 2024) | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity of the Company | ||||||||
| Non-controlling interest in subsidiaries | ||||||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See accompanying notes to the consolidated financial statements.
| 2 |
Impact BioMedical, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(unaudited)
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Costs and expenses: | ||||||||
| Sales, general and administrative compensation (inclusive of stock based compensation) | ||||||||
| Sales and marketing | ||||||||
| Professional Fees | ||||||||
| Research and development | ||||||||
| Depreciation and Amortization | ||||||||
| Rent and utilities | ||||||||
| Other operating expenses | ||||||||
| Total costs and expenses | ||||||||
| Operating loss | ( | ) | ( | ) | ||||
| Other income (expense): | ||||||||
| Interest income | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Loss from operations before income taxes | ( | ) | ( | ) | ||||
| Income tax benefit/(expense) | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Loss from operations attributed to noncontrolling interest | ||||||||
| Net loss attributable to common stockholders | $ | ( | ) | $ | ( | ) | ||
| Loss per common share: | ||||||||
| Basic | $ | ( | ) | $ | ( | ) | ||
| Diluted | $ | ( | ) | $ | ( | ) | ||
| Shares used in computing loss per common share: | ||||||||
| Basic | ||||||||
| Diluted | ||||||||
See accompanying notes to the consolidated financial statements.
| 3 |
Impact BioMedical, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholder’s Equity
(unaudited)
| Common Stock | Preferred Stock | Additional Paid-in | Accumulated | Total Impact | Non- controlling Interest in | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Equity | Subsidiary | Total | ||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||||
| - | ||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance, March 30, 2024 | $ | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||||
| Acquisition of DSS PureAir, Inc. assets | - | |||||||||||||||||||||||||||||||||||
| Issuance of common stock for professional services | - | |||||||||||||||||||||||||||||||||||
| Stock based compensation | - | |||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||||
See accompanying notes to the consolidated financial statements.
| 4 |
Impact BioMedical, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
For the Three Months Ended March 31,
(unaudited)
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Loss from continuing operations | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile loss from continuing operations to net cash used by operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Accrued interest on notes payable, related party | ||||||||
| Stock based payment for professional services received | ||||||||
| Stock based compensation | ||||||||
| Decrease (increase) in assets: | ||||||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Increase (decrease) in liabilities: | ||||||||
| Accounts payable | ( | ) | ||||||
| Accrued expenses | ( | ) | ||||||
| Net cash used by operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Payments received on notes receivable | ||||||||
| Net cash provided by investing activities | ||||||||
| Cash flows from financing activities: | ||||||||
| Borrowings of long-term debt | ||||||||
| Net provided by from financing activities | ||||||||
| Net increase (decrease) in cash | ( | ) | ||||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
See accompanying notes to the consolidated financial statements.
| 5 |
Impact Biomedical, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Note 1. Nature of Operations and Basis of Presentation
Nature of Operations
Impact BioMedical, Inc., incorporated
in the State of
Our business model includes partnering and potentially direct sales for commercialization and distribution. Potential licensors and development partners include pharmaceutical, consumer packaged goods companies and others, who would commercialize IBO technologies in exchange for milestone, and royalty payments. Currently, our operations are conducted, and our assets are owned through our principal subsidiaries: (i) Global BioLife, Inc. (“Global BioLife”), which was incorporated on April 14, 2017, (ii) Impact BioLife Science, Inc. (“Impact BioLife”), which was incorporated on August 28, 2020, (iii) Global BioMedical, Inc. (“Global BioMedical”), which was incorporated on April 18, 2017, and (iv) Sweet Sense, Inc. (“Sweet Sense”), which was incorporated on April 30, 2018.
Impact has several unique and proprietary technologies that are in continuing development:
Linebacker™
Linebacker is a platform of small molecule electrophilically enhanced polyphenol compounds with potential application in oncology (solid tumors), inflammatory disorders, and neurology. Polyphenols are substances found in many nuts, vegetables, and berries. Linebacker compounds are modified Myricetin, which is a common plant-derived flavonoid. Myricetin exhibits a wide range of activities that include strong antioxidant and anti-inflammatory activities (source: NIH).
Linebacker can potentially be developed as monotherapy or co-therapy to down-regulate PIM (proviral integration site for Moloney murine leukemia virus) kinase which plays a key role as an oncogene in various cancers (e.g. colon, lung, prostate, breast). Additional potential applications include inflammatory disorders and neurology.
Linebacker-1 and Linebacker-2 compounds have been licensed to ProPhase Laboratories (NASDAQ: PRPH) for development and commercialization worldwide, from which Impact Biomedical could receive future milestone and royalty payments.
Laetose™
Laetose™ technology demonstrates compelling potential in reducing caloric intake and glycemic index in foods, while also inhibiting tumor necrosis factor alpha (TNF-α), a cytokine associated with inflammatory chronic diseases (data on file with IBO).
The patented formulation has potential to inhibit the inflammatory and metabolic response of sugar alone and has potential applications in therapeutic administration to reduce or limit inflammatory or metabolic diseases (e.g., diabetes). Use of Laetose in a daily diet, compared to sugar, could result in 30% lower sugar consumption and lower caloric and glycemic index/load.
Functional Fragrance Formulation (“3F”)
3F is a suite of “functional fragrances” containing specialized botanical ingredients (e.g., terpenes) with potential application as an antimicrobial, or as an additive in insect repellents, detergents, lotions, shampoo, fabrics and other substances to increase effectiveness. Global BioLife is seeking to commercialize this product. Together with Chemia, we are attempting to license 3F. Any potential profits from the 3F project will be split between Global BioLife and Chemia pursuant to the terms of the 20- year Royalty Agreement.
| 6 |
Impact Biomedical, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Equivir™/Equivir G
Equivir/Equivir G technology is a novel blend of FDA Generally Recognized as Safe (GRAS) eligible polyphenols (e.g. Myricetin, Hesperetin, Piperine) which have demonstrated antiviral effects with additional potential application as health supplements or medication. Polyphenols are substances found in many nuts, vegetables, and berries. Myricetin is a member of the flavonoid class of polyphenolic compounds with antioxidant properties. Hesperitin is a flavanone and Piperine is an alkaloid, commonly found in black pepper. Equivir/Equivir G is licensed to ProPhase Laboratories for development and commercialization worldwide
Emerging Technology
IBO continually evaluates additional technologies that are in various phases of development which can be advanced to patent filings and allowances. These include, and are not limited to biopharmaceuticals, indoor air quality products, preservatives, bioplastics, personalized medicine (e.g., genomics, diagnostics), nanotechnology, cannabis products and technology, pain management, and others. These activities include discussions with inventors, scientists, universities, research foundations, and other parties, which, subject to completion of diligence, and approval of the respective management, could potentially expand the offerings of IBO.
As of the date of this report, we have not generated significant revenues from operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including possible delays in our research, testing and marketing efforts or wider economic downturns.
Note 2. Summary of Significant Accounting and Reporting Policies
Basis of Presentation and Principles of Consolidation
The Company’s consolidated financial statements
have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The consolidated financial statements include all accounts of the Company and its majority owned and controlled subsidiaries.
| 7 |
Impact Biomedical, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
The consolidated financial statements include all accounts of the entities as of the reporting period ending dates and for the reporting periods as follows:
| Name of consolidated subsidiary | State or other jurisdiction of incorporation or organization | Date of incorporation or formation | Attributable interest as of March 31, 2025 | Attributable interest as of December 31, 2024 | ||||||||
| Global BioMedical, Inc. | % | % | ||||||||||
| Global BioLife, Inc. | % | % | ||||||||||
| BioLife Sugar, Inc | % | % | ||||||||||
| Happy Sugar Inc | % | % | ||||||||||
| Sweet Sense Inc. | % | % | ||||||||||
| Global Sugar Solutions Inc. | % | % | ||||||||||
As of March 31, 2025, and December 31, 2024, the aggregate
noncontrolling interest was equity of $
Use of estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the dates of the balance sheets and reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates.
Reclassifications
Costs in the amount of $
Basic loss per share is computed by dividing the net
loss attributable to the common stockholders by weighted average number of shares of common stock outstanding during the period. Fully
diluted loss per share is computed like basic loss per share except that the denominator is increased to include the number of additional
common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were
dilutive. Dilutive financial instruments issued or outstanding for the three months ended March 31, 2025, and the year ended December 31,
2024 include shares of Series A Convertible Preferred Shares which are not eligible for conversion until April 10, 2027,
options priced at $ per share expiring on and
Fair Value of Financial Instruments
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Fair Value Measurement Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
● Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets,
● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
The carrying amounts reported in the balance sheet of cash, other receivables, accounts payable and accrued expenses approximate fair value because of the immediate or short-term maturity of these financial instruments. The fair value of notes receivable approximates their carrying value as the stated or discounted rates of the notes do reflect recent market conditions. Notes payable, related party are recorded at fair value based on several factors (see Note 9).
| 8 |
Impact Biomedical, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Cash and cash equivalents
The Company considers all highly liquid investments
with a maturity of three months or less at the date of acquisition to be cash equivalents. There were
Notes receivable, unearned interest, and related recognition
The Company records all future payments of principal and interest on notes as notes receivable, which are then offset by the amount of any related unearned interest income. For financial statement purposes, the Company reports the net investment in the notes receivable on the consolidated balance sheet as current or long-term based on the maturity date of the underlying notes. Such net investment is comprised of the amount advanced on the loans, adjusting for net deferred loan fees or costs incurred at origination, amounts allocated to warrants received upon origination, and any payments received in advance, if applicable. The unearned interest is recognized over the term of the notes and the income portion of each note payment is calculated so as to generate a constant rate of return on the net balance outstanding. If applicable, any net deferred loan fees or costs, together with discounts recognized in connection with warrants acquired at origination, are accreted as an adjustment to yield over the term of the loan. (Note 4)
Inventory
Inventories consist air filtration systems, which and are stated at the lower of cost or net realizable value on the first-in, first-out (“FIFO”) method. At the closing of each reporting period, the Company evaluates its inventory in order to adjust the inventory balance for obsolete and slow-moving items. No allowance for obsolescence was deemed necessary as of March 31, 2025, and December 31, 2024.
Goodwill
Goodwill is the excess of cost of an acquired entity over the fair value of amounts assigned to assets acquired and liabilities assumed in a business combination. FASB ASC Topic 350 provides an entity with the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Some of the qualitative factors considered in applying this test include consideration of macroeconomic conditions, industry and market conditions, cost factors affecting the business, and overall financial performance of the business. If, after completing the assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, the Company will proceed to a quantitative test. If qualitative factors are not deemed sufficient to conclude that the fair value of the reporting unit more likely than not exceeds its carrying value, then a one-step approach is applied in making an evaluation. The evaluation utilizes an income approach (discounted cash flow analysis). The computations require management to make significant estimates and assumptions, including, among other things, selection of comparable publicly traded companies, the discount rate applied to future earnings reflecting a weighted average cost of capital, and earnings growth assumptions. The Company believes the estimates and assumptions used in our impairment assessments are reasonable and based on available market information, but variations in any of the assumptions could result in materially different calculations of fair value and determinations of whether or not an impairment is indicated. A discounted cash flow analysis requires management to make various assumptions about future sales, operating margins, capital expenditures, working capital, and growth rates. Cash flow projections are derived from one-year budgeted amounts plus an estimate of later period cash flows, all of which are determined by management. Subsequent period cash flows are developed for each reporting unit using growth rates that management believes are reasonably likely to occur. Impairment of goodwill is measured as the excess of the carrying amount of goodwill over the fair values of recognized and unrecognized assets and liabilities of the reporting unit. As of December 31, 2024, the Company fully impaired its goodwill (Note 6).
Intangible Assets
The estimated fair values of
acquired intangibles are generally determined based upon future economic benefits such as earnings and cash flows. Acquired
identifiable intangible assets are recorded at fair value and are amortized over their estimated useful lives. Acquired intangible
assets with an indefinite life are not amortized but are reviewed for impairment at least annually as of December 31st,
or more frequently whenever events or changes in circumstances indicate that the carrying amounts of those assets are below their
estimated fair values. Impairment is tested under ASC 350.
| 9 |
Impact Biomedical, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Recoverability of Long-Lived Assets
We evaluate long-lived assets such as property, equipment and definite lived intangible assets, such as patents, for impairment whenever events or circumstances indicate that the carrying value of the assets recognized in our financial statements may not be recoverable. Factors that we consider include whether there has been a significant decrease in the market value of an asset, a significant change in the way an asset is being utilized, or a significant change, delay or departure in our strategy for that asset, or a significant change in the macroeconomic environment. Our assessment of the recoverability of long-lived assets involves significant judgment and estimation. These assessments reflect our assumptions, which, we believe, are consistent with the assumptions hypothetical marketplace participants use. Factors that we must estimate when performing recoverability and impairment tests include, among others, forecasted revenue, margin costs and the economic life of the asset. If impairment is indicated, we determine if the total estimated future cash flows on an undiscounted basis are less than the carrying amounts of the asset or assets. If so, an impairment loss is measured and recognized.
Our impairment loss calculations require that we apply judgment in identifying asset groups, estimating future cash flows, determining asset fair values, and estimating asset’s useful lives. The Company reviews identifiable amortizable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Determination of recoverability is based on the lowest level of identifiable estimated undiscounted cash flows resulting from use of the asset and its eventual disposition. Measurement of any impairment loss is based on the excess of the carrying value of the asset over its fair value. Based on the uncertainty of forecasts inherent with a new product, events such as the failure to generate forecasted revenue from new products could result in a non-cash impairment in future periods.
Revenue Recognition
The Company has adopted ASC Topic 606, Revenue from Contracts with Customers (“Topic 606”). The Company enters into licensing and development agreements with collaborators for the development of its technologies. The terms of these agreements contain multiple performance obligations which may include (i) licenses, or options to obtain licenses, to the Company’s technology, (ii) rights to future technological improvements, and/or (iii) research activities to be performed on behalf of the collaborative partner. Payments to the Company under these agreements may include upfront fees, option fees, exercise fees, payments based upon the achievement of certain milestones, and royalties on product sales. Revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under the agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when or as the Company satisfies each performance obligation.
The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration to which it is entitled in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when or as the performance obligation is satisfied.
| 10 |
Impact Biomedical, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Compensation cost for stock awards are measured at fair value and the Company recognizes compensation expense over the service period for which awards are expected to vest. The Company uses the Black-Scholes-Merton option pricing model for determining the estimated fair value for stock-based awards. The Black-Scholes-Merton model requires the use of subjective assumptions which determine the fair value of stock-based awards, including the option’s expected term and the price volatility of the underlying stock. For equity instruments issued to consultants and vendors in exchange for goods and services the Company determines the measurement date for the fair value of the equity instruments issued at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement. The Company record stock based compensation expense of approximately $ and $ for the three months ended March 31, 2025 and 2024, respectively and is included in Sales, general and administrative compensation (inclusive of stock based compensation) on the accompanying Statement of Operations.
Research and Development
Research and development costs are expensed as incurred.
Total research and development costs were $
Provision for Credit Losses
The Company adopted amended accounting guidance ASC Topic 326 which requires an allowance for credit losses to be deducted from the amortized cost basis of financial assets to present the net carrying value at the amount that is expected to be collected over the contractual term of the asset considering relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. In estimating expected losses in the loan and lease portfolio, borrower-specific financial data and macro-economic assumptions are utilized to project losses over a reasonable and supportable forecast period. Assumptions and judgment are applied to measure amounts and timing of expected future cash flows, collateral values and other factors used to determine the borrowers’ abilities to repay obligations. After the forecast period, the Company utilizes longer-term historical loss experience to estimate losses over the remaining contractual life of the loans. As of March 31, 2025 and December 31, 2024 the Company has deemed that no additional reserve on credit losses were necessary.
Continuing Operations and Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. This basis of accounting contemplates the recovery of our assets and the satisfaction of liabilities in the normal course of business. As reflected in the accompanying financial statements the Company has incurred operating losses as well as negative cash flows from operating activities over the past two years. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. These consolidated financial statements do not include any adjustments to the specific amounts and classifications of assets and liabilities, which might be necessary should we be unable to continue as a going concern.
To continue as a going concern, the Company completed
an initial public offering on September 16, 2024 raising $
| 11 |
Impact Biomedical, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Recent Accounting Standards
The Financial Accounting Standards Board (FASB) issues various Accounting Standards Updates relating to the treatment and recording of certain accounting transactions. There are several new accounting pronouncements issued by FASB which are not yet effective. Each of these pronouncements, as applicable, has been or will be adopted by the Company. As of March 31, 2025, none of these pronouncements are expected to have a material effect on the financial position, results of operations or cash flows of the Company.
In November 2023, the Financial Accounting Standards Board (“FASB”), issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which improves reportable segment disclosure through enhanced disclosures about significant segment expenses. The amendment is effective for fiscal years beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024 and early adoption is permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company has adopted the enhanced segment disclosures of the year ended December 31, 2024. The Company reports its segment information to reflect the manner in which the Company’s chief operating decision maker (“CODM”) reviews and assesses performance. The Company’s Chief Executive Officer and Chief Operating Officer have joint responsibilities as the CODM and review and assess the performance of the Company as a whole.
The primary financial measures used by the CODM to evaluate performance and allocate resources are net income (loss) and operating income (loss). The CODM uses net income (loss) and operating income (loss) to evaluate the performance of the Company’s ongoing operations and as part of the Company’s internal planning and forecasting processes. Information on Net income (loss) and Operating income (loss) is disclosed in the Consolidated Statements of Operations. Segment expenses and other segment items are provided to the CODM on the same basis as disclosed in the Consolidated Statements of Operations.
The CODM does not evaluate performance or allocate resources based on segment assets, and therefore such information is not presented in the notes to the financial statements
In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures” which is intended to simplify various aspects related to accounting for income taxes. ASU 2023-09 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The amendments in ASU 2023-09 are effective for public business entities for fiscal years beginning after December 15, 2024, including interim periods therein. The Company adopted this as of December 31, 2024.
In November 2024, the FASB issued ASU No. 2024-03 (“ASU 2024-03”), Disaggregation of Income Statement Expenses (“DISE”). ASU 2024-03 requires disaggregated disclosure of income statement expenses for public business entities. ASU 2024-03 does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. As revised by ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, the provisions of ASU 2024-03 are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. With the exception of expanding disclosures to include more granular income statement expense categories, we do not expect the adoption of ASU 2024-03 to have a material effect on our consolidated financial statements taken as a whole.
| 12 |
Impact Biomedical, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Note 3. Inventory
Inventory consisted of the following as of:
| March 31, 2025 | December 31, 2024 | |||||||
| Finished Goods | $ | $ | ||||||
| Less allowance for obsolescence | ||||||||
| $ | $ | |||||||
Note 4. Notes Receivable
On February 19, 2021, Impact BioMedical, Inc. entered
into a promissory note with an individual. The Company loaned the principal sum of $
Note 5 Property, Plant and Equipment, Net
Property, plant and equipment consisted of the following as of:
| Estimated | March 31, | December 31, | ||||||||
| Useful Life | 2025 | 2024 | ||||||||
| Machinery and equipment | $ | $ | ||||||||
| Total Cost | ||||||||||
| Less accumulated depreciation | ||||||||||
| Property, plant and equipment, net | $ | $ | ||||||||
Depreciation expense for the three months ended March
31, 2025 and 2024 was approximately $
Note 6. Goodwill
Goodwill balances and activity consisted of the following:
| Balance at December 31, 2023 | $ | |||
| Goodwill adjustment | ( | ) | ||
| Balance at December 31, 2024 | $ |
As of December 31, 2024, management performed annual goodwill impairment testing. A quantitative analysis was prepared utilizing the Market Approach and Income Approach valuing the Company and an impairment of goodwill was identified as result of these tests. As of December 31, 2024, the Company fully impaired its goodwill
Note 7. Intangible Assets
The definite-lived intangible assets, to be amortized between 1 and 20 years, balances, and activity for the three months ended March 31, 2025 and year ended December 31, 2024 consisted of the following:
| March 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||
| Useful Life | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||
| Developed technology assets | $ | $ | $ | $ | ||||||||||||||||||||||
| Acquired assets | $ | $ | $ | $ | ||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| 13 |
Impact Biomedical, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
On February 25, 2025, the Company completed the acquisition
of certain assets owned by DSS Pure Air, Inc. (“DSS PureAir”), a related party, for $
Amortization expense for the three months ended March
31, 2025 and 2024 was approximately $
The following table represents future amortization of developed technologies for the years ending December 31:
| 2025 | $ | ||||
| 2026 | $ | ||||
| 2027 | $ | ||||
| 2028 | $ | ||||
| 2029 | $ | ||||
| Thereafter | $ |
Note 8. Note payable, related party
On December 31, 2020, and later amended,
the Company executed a Revolving Promissory Note (“Note”) with DSS, a related party, which accrues interest at a rate of
The Company accounts for this Note as a liability under ASC 480, Distinguishing Liabilities form Equity (“ASC 480”). In accordance with ASC 825-10, the carrying value of the Note will be recorded at fair value and will be remeasured at each reporting period with the changes in fair value recognized in earnings.
| 1) | Developed the Note Payable repayment schedule |
| 2) | Developed the following inputs underlying the simulation analysis |
| i) | Stock price | |
| ii) | VWAP |
| 3) | Inputs (i) and (ii), were assigned a normal probability distribution, which has a mean of 0 and a standard deviation of 1, and a correlation of .9890 based on analysis of the guideline public companies |
| 4) | Ran a simulation with 25,000 trials for purposes of capturing the key inputs discussed above (i.e., forecasting the stock price and VWAP). |
| 5) | For the period from the 37th payment to maturity date, the DCF Method includes the remaining payments required to be made in cash. |
| 6) | Captured the results of the simulation and concluded based on the simulation results |
| 14 |
Impact Biomedical, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Note 9. Financial Instruments
Cash, Note payable, related party
The following tables show the Company’s cash, cash equivalents, restricted cash, and note payable, related party by significant investment category as of:
| March 31, 2025 | ||||||||||||||||||||
| Adjusted cost | Unrealized Gain/(Loss) | Fair Value | Cash and Cash Equivalents | Note Payable, Related Party | ||||||||||||||||
Level 1 | ||||||||||||||||||||
| Cash | $ | $ | - | $ | $ | $ | - | |||||||||||||
| Level 2 | ||||||||||||||||||||
| Note payable, related party | ( | ) | ||||||||||||||||||
| Total | $ | $ | ( | ) | $ | $ | $ | |||||||||||||
December 31, 2024 | ||||||||||||||||||||
| Adjusted Cost | Unrealized Gain/(Loss) | Fair Value | Cash and Cash Equivalents | Note Payable, Related Party | ||||||||||||||||
Level 1 | ||||||||||||||||||||
| Cash | $ | $ | - | $ | $ | $ | - | |||||||||||||
| Level 2 | ||||||||||||||||||||
| Note payable, related party | ( | ) | ||||||||||||||||||
| Total | $ | $ | ( | ) | $ | $ | $ | |||||||||||||
Note 10. Stockholders’ Equity
On September 16, 2024, Impact Biomedical
Inc., entered into an underwriting agreement (the “Underwriting Agreement”) with Revere Securities, LLC., as representative
(the “Representative”) of the underwriters named therein (the “Underwriters”), pursuant to which the Company
agreed to sell to the Underwriters in a firm commitment initial public offering (the “Offering”) an aggregate of
of the Company’s shares of common stock, par value $
per share at a public offering price of $
per share. On September 17, 2024, the Company closed the Offering. The total net proceeds to the Company from the Offering, after deducting
discounts, expenses allowance and expenses, was approximately $
The Company records stock-based payment expense related
to options and warrants based on the grant date fair value in accordance with FASB ASC 718. Stock-based compensation includes expense
charges for all stock-based awards to employees, directors and consultants. Such awards include option grants, warrant grants, and restricted
stock awards. On October 1, 2024, option grants with a purchase price of $ per share were awarded to certain officers, directors
and consultants of the Company. These options have various vesting periods, and all expire on October 31, 2031. Potential proceeds of
these grants is $ and are fair valued using a Black-Scholes model at approximately $
| 15 |
Impact Biomedical, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
On February 25, 2025, the Company completed the acquisition
of certain assets owned by DSS Pure Air, Inc. (DSS PureAir”), a related party, for $
On February 26, 2025, the Company issued shares of the Company’s common stock as payment of legal fees incurred associated with the Company’s initial public offering (“IPO”), registration of shares associated with its equity incentive plan as well as other related services.
Note 11. Related Party Transactions
General and Administrative Costs
There are certain general and administrative costs
incurred by DSS, a related party, on behalf of the Company which are passed through to the Company on a monthly basis. These costs consist
of primarily payroll costs for certain DSS employees and are allocated based on estimated time spent on behalf of the Company. Beginning
in January 2024, these costs are approximately $
Note payable, related party
On December 31, 2020, and later amended,
the Company executed a Revolving Promissory Note (“Note”) with DSS, a related party, which accrues interest at a rate of
Note 12. Commitments and Contingencies
On August 15, 2018, the Company entered into Royalty
Agreement with Chemia Corporation (“Chemia”) pursuant to which Chemia transferred to the Company all of its right to 3F (Functional
Fragrance Formulation). This agreement has a 20-year term and auto renews for a period of 1 year unless mutually agreed upon by both parties.
3F consists of 3F Mosquito Repellant and 3F Anti-Viral formulations. Based on the Royalty Agreement, the Company should cover all the
costs to prepare and finalize necessary patent application and other intellectual property related to 3F. Chemia agreed to support the
Company in efforts leading to development of 3F intellectual property and it is licensing. Based on Royalty Agreement any payments received
from development, sales, licensing or transfer of 3F technology will be paid
On March 19, 2022, Impact BioMedical entered into
a License Agreement (“Equivir License”) with a third-party (“Licensee”) where the Licensor is granted the right,
amongst other things, to develop, commercialize, and sell the Company’s Equivir technology. In exchange, the Licensee shall pay
the Company a royalty of
Note 13. Acquisition
On February 25, 2025, the Company
completed the acquisition of the assets owned by DSS Pure Air, Inc. (“DSS PureAir”), a related party and under common
control of DSS, Inc., for $
Note 14. Supplemental Cash Flow Information
The following table summarizes supplemental cash flows of noncash investing and financing activities for the three months ended March 31, 2025 and 2024:
| 2025 | 2024 | |||||||
| Shares issued in lieu of cash as payment for legal services | $ | 29,000 | - | |||||
| Shares issued for acquisition of DSS PureAir assets | $ | 1,150,000 | - | |||||
Note 15. Subsequent Events
The Company has evaluated all subsequent events and transactions through May 14, 2025, the date that the consolidated financial statements were available to be issued and noted no subsequent events requiring financial statement recognition or disclosure.
| 16 |
ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
Certain statements contained herein this report constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “1995 Reform Act”). Except for the historical information contained herein, this report contains forward-looking statements (identified by words such as “estimate,” “project”, “anticipate”, “plan”, “expect”, “intend”, “believe”, “hope”, “strategy” and similar expressions), which are based on our current expectations and speak only as of the date made. These forward-looking statements are subject to various risks, uncertainties and factors that could cause actual results to differ materially from the results anticipated in the forward-looking statements.
Overview
Impact Biomedical Inc. (“IBO”. “Impact”, “Impact BioMedical”, “we”, “us”, “our” or the “Company”) discovers, confirms, and patents unique science and technologies which can be developed into new offerings in human healthcare and wellness in collaboration with external partners through licensing, co-development, joint ventures, and other relationships, and currently trades on the NYSE American under ticker symbol IBO.
By leveraging technology and new science with strategic partnerships, we provide advances in biopharmaceuticals, over the counter direct to consumer wellness offerings, and drug discovery for the prevention, inhibition, and treatment of neurological, oncologic, and inflammatory diseases. In addition to our existing efforts, we continually search for, and evaluate, other potential new offerings to add to our portfolio.
Our business model includes partnering and potentially direct sales for commercialization and distribution. Potential licensors and development partners include pharmaceutical, consumer packaged goods companies and others, who would commercialize IBO technologies in exchange for milestone, and royalty payments. Currently, our operations are conducted, and our assets are owned through our principal subsidiaries: (i) Global BioLife, Inc. (“Global BioLife”), which was incorporated on April 14, 2017, (ii) Impact BioLife Science, Inc. (“Impact BioLife”), which was incorporated on August 28, 2020, (iii) Global BioMedical, Inc. (“Global BioMedical”), which was incorporated on April 18, 2017, and (iv) Sweet Sense, Inc. (“Sweet Sense”), which was incorporated on April 30, 2018.
Below is a list of our principal subsidiaries:
| ● | Impact BioLife Science, Inc.; | |
| ● | Global Biomedical, Inc.; | |
| ● | Global BioLife, Inc.; and | |
| ● | Sweet Sense, Inc. |
| 17 |
Impact BioLife Science, Inc. We are the sole owner of the outstanding equity of Impact BioLife Science, Inc.
Global Biomedical, Inc. We own 90.9% of Global Biomedical, Inc. outstanding equity.
Global BioLife, Inc. Through our majority owned subsidiary Global Biomedical, Inc., we own 81.8% of the outstanding equity of Global BioLife, Inc.
Sweet Sense, Inc. We are the owner of 95.5% of the outstanding equity of Sweet Sense.
Impact BioMedical has several unique and proprietary technologies that are in continuing development.
Linebacker
Linebacker is a platform of small molecule electrophilically enhanced polyphenol compounds with potential application in oncology (solid tumors), inflammatory disorders, and neurology. Polyphenols are substances found in many nuts, vegetables, and berries. Linebacker compounds are modified Myricetin, which is a common plant-derived flavonoid. Myricetin exhibits a wide range of activities that include strong antioxidant and anti-inflammatory activities (source: NIH).
Linebacker can potentially be developed as monotherapy or co-therapy to down-regulate PIM (proviral integration site for Moloney murine leukemia virus) kinase which plays a key role as an oncogene in various cancers (e.g. colon, lung, prostate, breast). Additional potential applications include inflammatory disorders and neurology.
Linebacker-1 and Linebacker-2 compounds have been licensed to ProPhase Laboratories (NASDAQ: PRPH) for development and commercialization worldwide, from which Impact Biomedical could receive future milestone and royalty payments.
Laetose
Laetose™ technology demonstrates compelling potential in reducing caloric intake and glycemic index in foods, while also inhibiting tumor necrosis factor alpha (TNF-α), a cytokine associated with inflammatory chronic diseases (data on file with IBO).
The patented formulation has potential to inhibit the inflammatory and metabolic response of sugar alone and has potential applications in therapeutic administration to reduce or limit inflammatory or metabolic diseases (e.g., diabetes). Use of Laetose in a daily diet, compared to sugar, could result in 30% lower sugar consumption and lower caloric and glycemic index/load.
Laetose has a unique composition patent allowed in the United States and patents are pending in other countries worldwide.
IBO is actively seeking potential partners for further development and commercialization of Laetose as a consumer-packaged or biopharmaceutical offering worldwide.
Functional Fragrance Formulation (“3F”)
3F is a suite of “functional fragrances” containing specialized botanical ingredients (e.g., terpenes) with potential application as an antimicrobial, or as an additive in insect repellents, detergents, lotions, shampoo, fabrics and other substances to increase effectiveness.
IBO has partnered with the Chemia Corporation (St. Louis, MO) to pursue development of the 3F technology. Chemia is a leading developer and manufacturer of fragrances and flavors.
In addition to Chemia, IBO is actively seeking potential partners for further development and commercialization of 3F worldwide, given the broad application of this technology.
Composition patents have been issued in the U.S. and are pending in other countries.
| 18 |
Equivir
Equivir/Equivir G technology is a novel blend of FDA Generally Recognized as Safe (GRAS) eligible polyphenols (e.g. Myricetin, Hesperetin, Piperine) which have demonstrated antiviral effects with additional potential application as health supplements or medication. Polyphenols are substances found in many nuts, vegetables, and berries. Myricetin is a member of the flavonoid class of polyphenolic compounds with antioxidant properties. Hesperitin is a flavanone and Piperine is an alkaloid, commonly found in black pepper.
Equivir/Equivir G is licensed to ProPhase Laboratories for development and commercialization worldwide. ProPhase Lab’s initial focus is for use as an over-the-counter offering for upper respiratory wellness. Additional applications could be pursued in the future.
Method and composition patents are issued in the U.S. and other countries.
Emerging Technology
Impact BioMedical continually evaluates additional proprietary technologies that are in various phases of development. These include, and are not limited to biopharmaceuticals, indoor air quality products, preservatives, bioplastics, personalized medicine (e.g. genomics, diagnostics), nanotechnology, cannabis products and technology, pain management, and others.
These activities include discussions with potential companies/technologies which, subject to completion of diligence, and approval of the respective management boards, could potentially expand the offerings of Impact Biomedical Inc. There is no assurance that anyone, or all, of these will result in a material transaction and this is exemplary of consistent and ongoing search and discovery efforts within Impact Biomedical Inc.
Costs and expenses
| Three months ended March 31, 2025 | Three months ended March 31, 2024 | % Change | ||||||||||
| Sales, general and administrative compensation | $ | 246,000 | $ | 148,000 | 66 | % | ||||||
| Stock-based compensation | 2,000 | - | N/A | |||||||||
| Sales and marketing | 19,000 | 8,000 | 138 | % | ||||||||
| Professional Fees | 223,000 | 145,000 | 54 | % | ||||||||
| Research and development | 103,000 | 183,000 | -44 | % | ||||||||
| Depreciation and Amortization | 283,000 | 280,000 | 1 | % | ||||||||
| Rent and utilities | 19,000 | 4,000 | 375 | % | ||||||||
| Other operating expenses | 115,000 | 3,000 | 3,733 | % | ||||||||
| Total costs and expenses | $ | 1,010,000 | $ | 771,000 | 31 | % | ||||||
Selling, general and administrative compensation costs increased 66% for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024 due to additional headcount year over year.
| 19 |
Stock based compensation includes expense charges for all stock-based awards to employees, directors, and consultants. Such awards can include option grants, warrant grants, and restricted and unrestricted stock awards. These types of awards were not used prior to the Company’s IPO in September 2024.
Sales and marketing costs, which includes internet and trade publication advertising, press releases, travel and entertainment costs. These increased 138% for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The increase in cost from the three months ended March 31, 2024 are associated with cost to attend trade shows and marketing efforts post IPO.
Professional fees increased 54% for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. These cost consist primarily of consulting and legal services associated with developing and implementing Impact BioMedical’s business plan. These costs increased in 2025 as the Company began to enact its business plan post IPO.
Research and development costs represent costs consisting primarily of independent, third-party testing of the various properties of each technology the Company owns, research on new technologies as well as cost to patent newly developed technologies and other related fees for the development of new technologies. Research and development decreased 44% for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024 due primarily to efforts put toward several of its patents during 2024 that have not continued into 2025.
Depreciation and amortization expense is flat for the three months ended March 31, 2025 as compared to March 31, 2024 and represents the amortization of the associated with the developed technology and patents acquired as part of the acquisition of Impact BioMedical by DSS. Amortization of these assets began on January 1, 2021, and will have a 20-year term.
Rent and utilities represents cost associated with office space located at 1400 Broadfield Blvd, Suite 100 Houston TX which the Company began subletting from DSS during the first quarter of 2024. The increase for the three months ended March 31, 2025 as compared to March 31, 2024 is due to additional space being leased.
Other operating expenses consist primarily of office supplies, IT support, travel and insurance costs. These costs increased 3,733% for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024 due primarily to increases in directors and officers insurance obtain post IPO.
Other Income (Expense)
| Three months ended March 31, 2025 | Three months ended March 31, 2024 | % Change | ||||||||||
| Interest income | $ | 3,000 | $ | 3,000 | 0 | % | ||||||
| Interest expense | (271,000 | ) | (230,000 | ) | 18 | % | ||||||
| Total other expense | $ | (268,000 | ) | $ | (227,000 | ) | -18 | % | ||||
Interest income is recognized on the Company’s notes receivable. Interest income was flat for three ended March 31, 2025 as compared to March 31, 2024 as the outstanding principal balance remained flat.
Interest expense is recognized on the Company’s debt to DSS. Interest expense increased 18% for the three months ended March 31, 2025 as compared to March 31, 2024, due to the increased outstanding balance of debt due.
| 20 |
Net loss
| Three months ended March 31, 2025 | Three months ended March 31, 2024 | % Change | ||||||||||
| Net loss | $ | (1,278,000 | ) | $ | (998,000 | ) | -28 | % | ||||
For the three months ended March 31, 2025 and 2024, the Company recorded increases in net loss of 28%. The increase in net loss is attributable to the Company’s cost associated with additional head count, the purchase of directors’ and officers’ insurance post IPO as well as increase in professional fees associated with the execution of the Company’s business plan.
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically met its liquidity and capital requirements primarily through debt financing. On September 16, 2024, the Company completed an initial public offering raising $3,726,000 net of issuance costs and is currently listed on the NYSE American under the ticker symbol IBO. The Company’s management intends to take additional actions necessary to continue as a going concern. Management’s plans concerning these matters include, among other things, monetization of its intellectual properties, and tightly controlling operating costs.
Cash Flow from Continuing Operating Activities
Net cash used by operating activities was $682,000 for the three months ended March 31, 2025 as compared to cash used by operating activities of $482,000 for the three months ended March 31, 2024. This fluctuation is driven by more payments of the Company’s accounts payable by approximately $289,000, as well as increase in net loss after reconciling items of approximately $213,000
Cash Flow from Investing Activities
Net cash provided by investing activities was $1,000 and $0 for the three months ended March 31, 2025 and March 31, 2024, respectively. This fluctuation is due to payments received on notes receivable during 2025 that were not received in 2024.
Cash Flow from Financing Activities
Net cash provided by financing activities was $0 for the three months ended March 31, 2025. During the three months ended March 31, 2024, net cash provided by financing activities was driven by borrowings from DSS of $483,000.
Off-Balance Sheet Arrangements
We do not have any material off-balance sheet arrangements that have, or are reasonably likely to have, an effect on our financial condition, financial statements, revenues, or expenses.
Critical Accounting Policies and Estimates
The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make judgments, assumptions and estimates that affect the amounts reported in our financial statements and accompanying notes. The financial statements as of December 31, 2024, describe the significant accounting policies and methods used in the preparation of the financial statements. There are no additional material changes to such critical accounting policies as of the Quarterly Report on Form 10-Q for the quarter ended March 31, 2025.
ITEM 4 - CONTROLS AND PROCEDURES
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures for the quarter ended March 31, 2025, pursuant to Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on this evaluation and on the material weaknesses disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023 which remained as of March 31, 2025, our principal executive officer and principal financial officer concluded that as of March 31, 2025, our disclosure controls and procedures were not effective to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is being recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that our disclosure controls are not effectively designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is being accumulated and communicated to management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
Changes in Internal Control over Financial Reporting
While changes in the Company’s internal control over financial reporting occurred during the quarter ended March 31, 2025, as the Company began implementation of the remediation steps described in our annual report dated December 31, 2024, we believe that there were no changes in the Company’s internal control over financial reporting during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
| 21 |
PART II
OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
We are not currently a party to any material legal proceedings. From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. Regardless of outcome, litigation can have an adverse impact on us due to defense and settlement costs, diversion of management resources, negative publicity, reputational harm and other factors.
ITEM 1A - RISK FACTORS
Smaller reporting companies are not required to provide the information required by this item.
ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 - MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5 - OTHER INFORMATION
None.
| 22 |
ITEM 6 - EXHIBITS
| 23 |
| 24 |
| 25 |
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.
| IMPACT BIOMEDICAL, INC. | ||
| May 14, 2025 | By: | /s/ Frank D. Heuszel |
| Frank D. Heuszel | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| May 14, 2025 | By: | /s/ Todd D. Macko |
| Todd D. Macko | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) | ||
| 26 |