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 September 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 November 9, 2025, there were 3,888,595 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.	20

	Item 3. Quantitative and Qualitative Disclosures About Market Risk.	27

	Item 4. Controls and Procedures.	27

PART II - OTHER INFORMATION.

	Item 1. Legal Proceedings.	30

	Item 1A. Risk Factors.	30

	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	30

	Item 3. Defaults upon Senior Securities.	30

	Item 4. Mine Safety Disclosures.	30

	Item 5. Other Information.	30

	Item 6. Exhibits	31

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

ZIVO BIOSCIENCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	September 30,			December 31,
	2025			2024
ASSETS

CURRENT ASSETS:
Cash	$	57,222		$	1,542,442
Accounts receivable		-			2,211
Prepaid expenses		224,177			90,789
Total current assets		281,399			1,635,442
OTHER ASSETS:
Operating lease - right of use asset		270,373			-
Security deposit		7,680			7,680
TOTAL ASSETS	$	559,452		$	1,643,122

CURRENT LIABILITIES:
Accounts payable	$	992,990		$	547,090
Accounts payable – related party		333,117			194,762
Customer deposits		15,000			-
Current portion of long-term operating lease		65,713			-
Current portion of note payable		139,223			138,164
Convertible note – at fair value		236,513			-
Short term loan payable		146,459			-
Accrued interest		71,313			65,628
Accrued liabilities – employee bonus and salary		1,613,940			1,096,179
Total current liabilities		3,614,268			2,041,823
LONG TERM LIABILITIES:
Lease liabilities		220,124			-
Long-term note payable, net of current portion		11,663			116,197
Total long-term liabilities		231,787			116,197
TOTAL LIABILITIES		3,846,055			2,158,020
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY (DEFICIT):
Common stock, $0.001 par value, 25,000,000 shares authorized as of September 30, 2025 and December 31, 2024; 3,832,327 and 3,621,335 issued and outstanding at September 30, 2025, and December 31, 2024, respectively		3,832			3,621
Additional paid-in capital		140,560,590			136,448,032
Accumulated deficit		(143,851,025	)		(136,966,551	)
Total stockholders’ equity (deficit)		(3,286,603	)		(514,898	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	559,452		$	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 September 30, 2025			For the Three Months ended September 30, 2024			For the Nine Months ended September 30, 2025			For the Nine Months ended September 30, 2024
REVENUES:
Product revenue	$	65,625		$	31,500		$	119,025		$	67,220
Total revenues		65,625			31,500			119,025			67,220

COSTS OF GOODS SOLD
Product costs		44,337			22,050			79,816			45,268
Total cost of goods sold		44,337			22,050			79,816			45,268

GROSS MARGIN		21,288			9,450			39,209			21,952

COSTS AND EXPENSES:
General and administrative		836,187			1,943,126			3,446,876			8,895,978
Research and development		203,444			326,361			3,452,336			2,891,452

Total costs and expenses		1,039,631			2,269,487			6,899,212			11,787,430

LOSS FROM OPERATIONS		(1,018,343	)		(2,260,037	)		(6,860,003	)		(11,765,478	)

OTHER (EXPENSE):
Interest expense		(12,959	)		(8,560	)		(22,717	)		(17,973	)
Other expense		(1,754	)		-			(1,754	)		-
Total other expense		(14,713	)		(8,560	)		(24,471	)		(17,973	)

NET LOSS	$	(1,033,056	)	$	(2,268,597	)	$	(6,884,474	)	$	(11,783,451	)

BASIC AND DILUTED LOSS PER SHARE	$	(0.27	)	$	(0.67	)	$	(1.82	)	$	(3.87	)
WEIGHTED AVERAGE BASIC AND DILUTED SHARES OUTSTANDING		3,817,172			3,410,444			3,792,684			3,041,466

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 SEPTEMBER 30, 2025 AND SEPTEMBER 30, 2024

(UNAUDITED)

					Additional
	Shares		Amount		Paid in Capital		Accumulated Deficit			Total
Balance, June 30, 2024		3,319,032	$	3,319		130,797,634	$	(133,096,567	)	$	(2,295,614	)
Private offering issuance of stock and warrants		125,958		126		1,036,247		-			1,036,373
Private offering issuance of stock and warrants – related parties		45,406		45		378,056		-			378,101
Employee and director equity-based compensation		-		-		1,066,668		-			1,066,668
Net loss for the three months ended September 30, 2024		-		-		-		(2,268,597	)		(2,268,597	)
Balance, September 30, 2024		3,490,396	$	3,490	$	133,278,605	$	(135,365,164	)	$	(2,083,069	)

					Additional Paid in		Accumulated
	Shares		Amount		Capital		Deficit			Total
Balance, June 30, 2025		3,817,005	$	3,817	$	140,273,406	$	(142,817,969	)	$	(2,540,746	)
Employee and director equity-based compensation		-		-		26,958		-			26,958
Issuance of warrants in connection with convertible note		-		-		15,241		-			15,241
Private sales of stock – related party		15,322		15		244,985		-			245,000
Net loss for the three months ended September 30, 2025		-		-		-		(1,033,056	)		(1,033,056	)
Balance, September 30, 2025		3,832,327	$	3,832	$	140,560,590	$	(143,851,025	)	$	(3,286,603	)

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 NINE MONTHS ENDED SEPTEMBER 30, 2025 AND SEPTEMBER 30, 2024

(UNAUDITED)

	Shares		Amount		Additional Paid in Capital		Accumulated Deficit			Total
Balance, December 31, 2023		2,382,356	$	2,382	$	121,373,488	$	(123,581,713	)	$	(2,205,843	)
Private offering issuance of stock and warrants		476,591		477		2,008,439		-			2,008,916
Private offering issuance of stock and warrants – related parties		185,959		186		1,168,696		-			1,168,882
Employee and director equity-based compensation		445,490		445		8,727,982		-			8,728,427
Net loss for the nine months ended September 30, 2024		-		-		-		(11,783,451	)		(11,783,451	)
Balance, September 30, 2024		3,490,396	$	3,490	$	133,278,605	$	(135,365,164	)	$	(2,083,069	)

					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		964,209		-			964,247
Exchange agreements		99,340		99		1,875,710		-			1,875,809
Exchange agreement – related party		47,320		48		862,425		-			862,473
Issuance of warrants in connection with convertible note		-		-		15,241		-			15,241
Private offering issuance		7,144		7		99,993		-			100,000
Private offering issuance – related party		18,810		19		294,981		-			295,000
Net loss for the nine months ended September 30, 2025		-		-		-		(6,884,474	)		(6,884,474	)
Balance, September 30, 2025		3,832,327	$	3,832	$	140,560,590	$	(143,851,025	)	$	(3,286,603	)

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 Nine Months Ended September 30, 2025			For the Nine Months Ended September 30, 2024
Cash Flows for Operating Activities:
Net loss	$	(6,884,474	)	$	(11,783,451	)
Adjustments to reconcile net loss to net cash used by operating activities:
Fair value adjustment – convertible debt		1,754			-
Non-cash lease expense		70,545			75,978
Employee and director equity-based compensation		964,247			8,728,427
Other expenses related to extinguishment of colicense agreements		2,738,281			-
Changes in assets and liabilities:
Prepaid expenses		(133,388	)		(102,086	)
Security deposits		-			(4,681	)
Customer deposits		15,000			45,000
Accounts receivable		2,211			(24,059	)
Accounts payable		445,900			(205,491	)
Accounts payable – related party		138,355			(36,409	)
Lease liabilities		(55,081	)		(84,315	)
Accrued liabilities		523,446			(16,701	)
Net cash (used in) operating activities		(2,173,204	)		(3,407,788	)

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

Cash Flow from Financing Activities:
Proceeds from short term loan payable, other		488,198			517,560
Payments on short term loan payable, other		(341,739	)		(402,547	)
Proceeds from convertible note and warrants		250,000			-
Payment on note payable		(103,475	)		-
Proceeds from private offering issuance		100,000			2,008,916
Proceeds from private offering issuance – related party		295,000			1,168,882
Net cash provided by financing activities		687,984			3,292,811

Increase (decrease) in cash		(1,485,220	)		(114,977	)
Cash at beginning of period		1,542,442			274,380
Cash at end of period	$	57,222		$	159,403

Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	7,273		$	14,391
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:

Nine months ended September 30, 2025:

During the nine months ended September 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.

Nine months ended September 30, 2024:

During the nine months ended September 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.

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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.

Convertible Note

The Company elected the fair value option to account for the convertible notes (as described in Note 3). The Company recorded the convertible debt at fair value upon issuance. The Company records changes in fair value in other expense in the consolidated condensed statements of operations, except for changes in fair value due to instrument-specific credit risk which, if present, will be recorded as a component of other comprehensive income (loss). As a result of applying the fair value option, direct costs and fees related to the convertible notes were expensed as incurred.

Fair Value of Financial Instruments

ASC 820, Fair Value Measurements, (“ASC 820”) provides guidance on the development and disclosure of fair value measurements. Pursuant to ASC 820, fair value is defined as an exit price, representing the amount 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. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The accounting guidance classifies fair value measurements in one of the following three categories for disclosure purposes:

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: Inputs other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace.

Level 3: Unobservable inputs which are supported by little, or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.

The Company evaluates assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level at which to classify them for each reporting period. This determination requires significant judgments to be made by the Company.

The carrying values of the Company’s financial instruments such as cash equivalents, accounts receivable, accounts payable, accrued liabilities, and debt approximate fair values due to the short-term nature of these items. The Company has elected the fair value option for its convertible loan (a level 3 fair value liability).

Going Concern

The Company has incurred net losses since inception, experienced negative cash flows from operations for the quarter ended September 30, 2025, and has an accumulated deficit of $143,851,025. 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.

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.

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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:	September 30, 2025		December 31, 2024
Operating lease right-of-use assets	$	270,373	$	-

Liabilities:
Current portion of long-term operating leases	$	65,713	$	-
Long-term operating leases, net of current portion		220,124		-
Total operating lease liabilities	$	285,837	$	-

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

For the Three months ended

For the Nine months ended

September 30,

2025

September 30,

2024

September 30,

2025

September 30,

2024

Operating lease expense

23,515

27,236

70,545

81,707

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

	As of
	September 30, 2025			December 31, 2024
Weighted-average remaining lease term:
Operating leases	3.85 Years			-

Discount rate:
Operating leases		11.00	%		-

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

	For the		For the
	Nine months ended		Nine months ended
	September 30, 2025		September 30, 2024
Cash paid for amounts included in the measurement of lease liabilities	$	55,081	$	90,045
ROU assets obtained in exchange for operating lease liabilities	$	315,571	$	-

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

Year Ended:	Operating Lease
December 31, 2025	$	23,041
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		354,871
Less: Interest		(69,034	)
Present value of lease obligations		285,837
Less: Current portion		(65,713	)
Long-term portion of lease obligations	$	220,124

NOTE 3 - DEBT

Entry into a convertible loan agreement

On July 4, 2025, the Company’s Board of Directors approved by unanimous consent an unsecured convertible note 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 note program. The investor loaned the Company $250,000 at an interest rate of 10% (effective interest rate of 15.1% including warrant costs) and a term of 24 months. Interest on the loan accrues and is due along with the principal at the end of the term. The loan and accrued but unpaid interest converts into common shares at the earlier of (a) a Qualified Financing of new money equity investment of at least $5 million, and other terms as defined in the agreement, at 80% of the price per share in the Qualified Financing or (b) the Maturity Date at $13.94 per share. The loan may be repaid at the Company’s option before the occurrence of the events in the preceding sentence at a premium of 115% of the loan and accrued interest balance. In the event there was a change in control event, as defined, the Company is required to provide the investor notice of a certain number of days to convert its loan and accrued interest into shares and the investor then has a certain number of days to convert or in the event of no conversion, all amounts due will become payable at the closing date of the change of control event. The conversion price will be equal to the lower of $13.94 per share or the price per share of the Company’s Common Stock as determined in change of control event.

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The Company elected to apply the fair value option for this convertible note. The primary reason for electing the fair value option is for simplification of accounting for the Convertible Note at fair value in its entirety versus bifurcation of the embedded derivatives. The fair value of note is calculated by discounting scheduled cash flows using discount rates reflecting the credit and interest rate risk inherent in the note. On the date of issuance, July 8, 2025, the Company recognized the liability at fair value of $234,759. Subsequently, the Company remeasured the liability and recognized an increase of approximately $1,754 in the condensed statements of operations within Other Expense, representing the change in fair value from the initial issuance to September 30, 2025. The following table represents the inputs used to calculate the fair value of the convertible notes as of September 30, 2025 and July 8, 2025:

	September 30, 2025			July 8, 2025
Term (in years)		1.77			2.00
Discount rate		13.3	%		13.3	%

Concurrently with the issuance of the convertible debt, 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. At issuance, the Company assigned the residual of the proceeds received for the convertible loan and warrant to the equity classified warrants in the amount of $15,241. The Company determined that the warrants did not contain any provisions within the agreement that would require further analysis under ASC 815, such as cash redemption features or exercise price adjustments (other than standard stock splits, dividends, recapitalization or reorganizations) or other characteristics which would preclude equity classification. Interest expense related to this loan was $5,685 during the three and nine months ended September 30, 2025.

Short term unsecured loan

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 September 30, 2025, the principal balance of $146,459 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.

Short term notes

On November 12, 2024, the Company finalized a restructuring of the outstanding convertible debt of $240,000 principal and accrued interest of $36,853. The original debt was a group of 12 separate convertible notes with three parties controlled by one lender and issued between 2008 and 2011. The notes were all past their original maturity dates and the lender allowed for rolling 30-day extensions until notice would be given by the lender to the Company to the contrary. The Company and the lender have now agreed to terminate all these existing notes on November 30, 2024, in favor of three new notes with an aggregate principal balance at November 30, 2024, of $277,254. The new notes have a term of 24 months, and annual interest rate of 1% percent, will be paid off in 24 equal payments beginning November 30, 2024 and ending October 31, 2026. The new notes are not convertible into equity and may be repaid early with no prepayment penalty. As of September 30, 2025 the total remaining principal value of the notes is $150,886.

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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 September 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 nine months ending September 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 September 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	September 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 September 30, 2025, the Company sold common stock in one private unregistered transaction to a related party resulting in total proceeds of $245,000 and the issuance of 15,322 shares of common stock. During the three months ended September 30, 2024, the Company sold common stock in 9 private unregistered transactions to investors resulting in the issuance of 171,364 shares of common stock and total proceeds of $1,414,474 including $1,336,373 in cash and $78,101 in accounts payable. Included in the totals are 45,406 shares of common stock sold to related parties for total proceeds of $378,101 including $300,000 in cash and $78,101 in related party accounts payable.

During the nine months ended September 30, 2025, the Company sold common stock in 2 private unregistered transactions to investors resulting in total proceeds of $395,000 and the issuance of 25,954 shares of common stock. Two of these transactions were to related parties for proceeds of $295,000 and the issuance of 18,810 shares of common stock. During the nine months ended September 30, 2024, the Company sold common stock in 38 private unregistered transactions to investors resulting in the issuance of 662,550 shares of common stock and total proceeds of $3,177,798 including $3,099,697 in cash and $78,101 in accounts payable. Included in the totals are 185,959 shares of common stock sold to related parties for total proceeds of $1,168,882 including $1,090,781 in cash and $78,101 in related party accounts payable.

Warrants

In the three months ended September 30, 2025, the Company issued to a private investor warrants to acquire 1,793 shares of the Company’s common stock. These warrants were tied to a convertible note under a board approved convertible note fund raising program.

In the nine months ended September 30, 2025, the Company issued warrants to acquire 2,855 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 and a convertible note. Of the total, warrants for 348 shares were issued to a Related Party.

In the three months ended September 30, 2024, the Company issued 17,134 warrants to investors under a board approved private fund raising program. Of the total, warrants for 4,540 shares were issued to Related Parties.

In the nine months ended September 30, 2024 the Company issued 17,832 warrants to investors under a board approved private fund raising program. Of the total, warrants for 5,238 shares were issued to Related Parties.

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Equity Compensation

For the three months ended September 30, 2025, the Company made no new equity awards for either Board Members or employees. For the three months ended September 30, 2025, the Company expensed $26,958 for equity compensation to certain employees related to awards made to certain employees and the non-employee directors in the prior periods. $12,544 of the total expense for the quarter was related to research and development (R&D) and the remaining $14,414 was for general and administrative expenses (G&A).

For the three months ended September 30, 2024, the Company recognized expense of $1,066,668 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. $106,236 of the total expense for the quarter was related to R&D and the remaining $960,432 was for G&A.

For the nine months ended September 30, 2025, the Company expensed $964,247 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. $72,536 of the total expense for the quarter was related to R&D and the remaining $891,711 was for G&A.

For the nine months ended September 30, 2024, the Company expensed $8,728,427 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. $2,166,464 of the total expense for the quarter was related to R&D and the remaining $6,561,963 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 vested 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 have vested 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 and vested on June 9, 2025, 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 nine months ended September 30, 2025 and 2024 are as follows:

For the Three Months Ended

For the Nine months ended

September 30,

2025

September 30,

2024

September 30,

2025

September 30,

2024

Restricted stock unit expense

554,321

830,989

2,387,151

The 2025 and 2024 RSA activity is as follows:

	September 30, 2025					September 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 September 30, 2025, there was no remaining unrecognized compensation expense related to RSAs.

The total fair value of RSAs vested during the nine months ended September 30, 2025, was $2,829,329, and during the nine months ended September 30, 2024, was $3,372,116. 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:

	September 30, 2025					September 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		2,855			14.11		17,832			8.24
Exercised		-			-		-			-
Cancelled		-			-		-			-
Expired		(285,669	)		55.51		(25,690	)		46.05
Outstanding, end of period		392,931		$	19.77		663,590		$	20.28

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Unregistered warrants outstanding and exercisable by price range as of September 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		3.87	$	6.00-11.99		17,832		8.24
	12.00-17.99		323,135		2.35		12.00-17.99		323,135		16.90
	18.00-23.99		7,500		4.24		18.00-23.99		7,500		20.19
	30.00-35.99		36,800		0.67		30.00-35.99		36,800		33.00
	48.00-53.99		1,041		0.18		48.00-53.99		1,041		48.00
	54.00-59.99		5,686		0.02		54.00-59.99		5,686		57.60
	60.00-65.99		281		0.62		60.00-65.99		281		62.40
	66.00-71.99		656		0.32		66.00-71.99		656		67.20
			392,931		2.25				392,931	$	18.86

Common Stock Warrants - Registered

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

	September 30, 2025				September 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 September 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

SEC Form 10-Q filed by Zivo Bioscience Inc.