# EDGAR Filing Document

**Accession Number:** 0000912544
**File Stem:** 0001493152-25-011661
**Filing Date:** 2025-8
**Character Count:** 104776
**Document Hash:** a502199139f1d8b26b62eeefc39cb409
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-25-011661.hdr.sgml**: 20250806

**ACCESSION NUMBER**: 0001493152-25-011661

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 56

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250806

**DATE AS OF CHANGE**: 20250806

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** NovelStem International Corp.
- **CENTRAL INDEX KEY:** 0000912544
- **STANDARD INDUSTRIAL CLASSIFICATION:** RETAIL-RETAIL STORES, NEC [5990]
- **ORGANIZATION NAME:** 07 Trade & Services
- **EIN:** 650385686
- **STATE OF INCORPORATION:** FL
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-14332
- **FILM NUMBER:** 251190706

**BUSINESS ADDRESS:**
- **STREET 1:** 2255 GLADES RD
- **STREET 2:** STE 237 W
- **CITY:** BOCA RATON
- **STATE:** FL
- **ZIP:** 33431
- **BUSINESS PHONE:** 5619988000

**MAIL ADDRESS:**
- **STREET 1:** 2255 GLADES RD
- **STREET 2:** STE 237 W
- **CITY:** BOCA RATON
- **STATE:** FL
- **ZIP:** 33431

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** NovelStem International Corp
- **DATE OF NAME CHANGE:** 20220802

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** HOLLYWOOD MEDIA CORP
- **DATE OF NAME CHANGE:** 20001215

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** HOLLYWOOD COM INC
- **DATE OF NAME CHANGE:** 20000511

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

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

**For the quarterly period ended June 30, 2025**

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________________ to _________________

Commission file number: 001-14332

**NOVELSTEM INTERNATIONAL CORP.**

(Exact name of registrant as specified in its charter)

<u>Florida</u> <u>65-0385686</u> <br> (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

<u>2255 Glades Road, Suite 221A, Boca Raton, FL</u> <u>33431</u> <br> (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code <u>(410) 598-9024</u>

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

---

| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |

---

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 filed, a non-accelerated filer, 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 ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> 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 ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

---

| | |
|:---|:---|
| Class | Outstanding at August 6, 2025 |
| Common Stock, $0.01 par value per share | 46881475 |

---

**NOVELSTEM INTERNATIONAL CORP.**

**Quarterly Report on Form 10-Q**

**for the Quarterly Period Ended June 30, 2025**

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
|  | **PAGE** |
| **[Part I Financial Information](#a_001)** |  |
| [Item 1. Unaudited Condensed Financial Statements:](#a_002) |  |
| &nbsp;&nbsp;&nbsp;[Unaudited Condensed Balance Sheets as of June 30, 2025 and December 31, 2024](#a_003) | 3 |
| &nbsp;&nbsp;&nbsp;[Unaudited Condensed Statements of Operations for the six and three months ended June 30, 2025 and 2024](#a_004) | 4 |
| &nbsp;&nbsp;&nbsp;[Unaudited Condensed Statements of Changes in Shareholders' Deficit for the six months ended June 30, 2025 and 2024](#a_005) | 5 |
| &nbsp;&nbsp;&nbsp;[Unaudited Condensed Statements of Cash Flows for the six months ended June 30, 2025 and 2024](#a_006) | 6 |
| &nbsp;&nbsp;&nbsp;[Notes to Unaudited Condensed Financial Statements](#a_007) | 7 |
| [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](#a_008) | 15 |
| [Item 3. Quantitative and Qualitative Disclosures About Market Risk](#a_009) | 18 |
| [Item 4. Controls and Procedures](#a_010) | 18 |
| [Part II Other Information](#a_011) |  |
| [Item 1. Legal Proceedings](#a_012) | 18 |
| [Item 1A. Risk Factors](#a_013) | 19 |
| [Item 6. Exhibits](#a_018) | 19 |
| **[Signatures](#a_019)** | 20 |

---

**PART I**

---

| | |
|:---|:---|
| **ITEM 1.** | **UNAUDITED CONDENSED FINANCIAL STATEMENTS** |

---

**NOVELSTEM INTERNATIONAL CORP.**

**CONDENSED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **As of** | **As of** |
|  | **June 30**<br>**2025** | **December 31,**<br>**2024** |
|  | **(Unaudited)** | |
| ASSETS |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash | $1106 | $6099 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, administrative fees |  | 10500 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses | 14186 | 15272 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 15292 | 31871 |
| Investment in NetCo |  | 128240 |
| Investment in NewStem, net | - | - |
| &nbsp;&nbsp;&nbsp;Total assets | $15292 | $160111 |
| LIABILITIES AND SHAREHOLDERS' DEFICIT |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $196272 | $167898 |
| &nbsp;&nbsp;&nbsp;Accrued expenses | 37673 | 68576 |
| &nbsp;&nbsp;&nbsp;Notes payable, including accrued interest | 295780 | 250000 |
| &nbsp;&nbsp;&nbsp;Current portion of long-term notes payable, including accrued interest | 1238932 | 4059366 |
| &nbsp;&nbsp;&nbsp;Bridge loan payable, related party, including accrued interest | 106952 |  |
| &nbsp;&nbsp;&nbsp;Convertible debt, including accrued interest | 114595 | 108646 |
| &nbsp;&nbsp;&nbsp;Derivative liability, guarantee | - | 650000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 1990204 | 5304486 |
| Commitments and contingencies (see Note 7) |  |  |
| Shareholders' deficit: |  |  |
| Common stock, $.01 par value, 100,000,000 shares authorized, 50,316,672 shares issued at June 30, 2025 and December 31, 2024 and 46,881,475 shares outstanding at June 30, 2025 and December 31, 2024 | 468815 | 468815 |
| Additional paid-in capital | 291570255 | 290947417 |
| Accumulated deficit | (293814228) | (296360853) |
| Treasury stock, at cost, 3,435,197 shares at June 30, 2025 and December 31, 2024 | (199754) | (199754) |
| &nbsp;&nbsp;&nbsp;Total shareholders' deficit | (1974912) | (5144375) |
| &nbsp;&nbsp;&nbsp;Total liabilities and shareholders' deficit | $15292 | $160111 |

---

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

**NOVELSTEM INTERNATIONAL CORP.**

**CONDENSED STATEMENTS OF OPERATIONS**

**(UNAUDITED)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** | **Three Months Ended** | **Three Months Ended** |
|  | **June 30,** | **June 30,** | **June 30,** | **June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Administrative fee income | $- | $6000 | $- | $3000 |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | 158537 | 327336 | 63964 | 144030 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 158537 | 327336 | 63964 | 144030 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss from operations | (158537) | (321336) | (63964) | (141030) |
| Other (income) expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Gain on derivative instrument |  | (25000) |  |  |
| &nbsp;&nbsp;&nbsp;Gain on disposal of equity method investment | (1171760) |  | (1171760) |  |
| &nbsp;&nbsp;&nbsp;Relief of indebtedness income | (1697024) |  | (1697024) |  |
| &nbsp;&nbsp;&nbsp;Interest expense | 163962 | 201406 | 51319 | 106642 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other (income) expenses | (2704822) | 176406 | (2817465) | 106642 |
| &nbsp;&nbsp;&nbsp;Income (loss) before income taxes | 2546285 | (497742) | 2753501 | (247672) |
| Provision for income tax | - | - | - | - |
| &nbsp;&nbsp;&nbsp;Income (loss) before equity in net income (loss) of equity method investees | 2546285 | (497742) | 2753501 | (247672) |
| Equity in net income (loss) of equity method investees | 340 | (108163) | 340 | (54953) |
| &nbsp;&nbsp;&nbsp;Net income (loss) | $2546625 | $(605905) | $2753841 | $(302625) |
| Basic and diluted net income (loss) per share: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net income (loss) per share - basic and diluted | $0.05 | $(0.01) | $0.06 | $(0.01) |
| Weighted average number of shares outstanding - basic | 46881475 | 46881475 | 46881475 | 46881475 |
| Weighted average number of shares outstanding-diluted | 47762983 | 46881475 | 47765983 | 46881475 |

---

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

**NOVELSTEM INTERNATIONAL CORP.**

**CONDENSED STATEMENTS OF SHAREHOLDERS' DEFICIT**

**(UNAUDITED)**

**For the Six Months Ended June 30, 2025:**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  |<br>**Number of**<br>**Shares** |<br>**Common**<br>**Stock** | **Additional**<br>**Paid-In**<br>**Capital** |<br>**Accumulated**<br>**Deficit** | **Number of**<br>**Treasury**<br>**Shares** |<br>**Treasury**<br>**Stock** | **Total**<br>**Shareholders'**<br>**Deficit** |
| Balance, January 1, 2025 | 46881475 | $468815 | $290947417 | $(296360853) | 3435197 | $(199754) | $(5144375) |
| Net loss |  |  |  | (207216) |  |  | (207216) |
| Stock-based compensation | - | - | 8741 | - | - | - | 8741 |
| Balance, March 31, 2025 | 46881475 | $468815 | $290956158 | $(296568069) | 3435197 | $(199754) | $(5342850) |
| Net income |  |  |  | 2753841 |  |  | 2753841 |
| Debt restructuring |  |  | 614000 |  |  |  | 614000 |
| Stock-based compensation | - | - | 97 | - | - | - | 97 |
| Balance, June 30, 2025 | 46881475 | $468815 | $291570255 | $(293814228) | 3435197 | $(199754) | $(1974912) |

---

**For the Six Months Ended June 30, 2024:**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  |<br>**Number of**<br>**Shares** |<br>**Common**<br>**Stock** | **Additional**<br>**Paid-In**<br>**Capital** |<br>**Accumulated**<br>**Deficit** | **Number of**<br>**Treasury**<br>**Shares** |<br>**Treasury**<br>**Stock** | **Total**<br>**Shareholders'**<br>**Deficit** |
| Balance, January 1, 2024 | 46881475 | $468815 | $290907217 | $(293127811) | 3435197 | $(199754) | $(1951533) |
| Net loss |  |  |  | (303280) |  |  | (303280) |
| Stock-based compensation | - | - | 13493 | - | - | - | 13493 |
| Balance, March 31, 2024 | 46881475 | $468815 | $290920710 | $(293431091) | 3435197 | $(199754) | $(2241320) |
| Net loss |  |  |  | (302625) |  |  | (302625) |
| Stock-based compensation | - | - | 8838 | - | - | - | 8838 |
| Balance, June 30, 2024 | 46881475 | $468815 | $290929548 | $(293733716) | 3435197 | $(199754) | $(2535107) |

---

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

**NOVELSTEM INTERNATIONAL CORP.**

**CONDENSED STATEMENTS OF CASH FLOWS**

**(UNAUDITED)**

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** |
|  | **June 30,** | **June 30,** |
|  | **2025** | **2024** |
| Cash flows from operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Net income (loss) | $2546625 | $(605905) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity in loss of equity method investees |  | 108163 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accretion of discount on note payable | 60417 | 88531 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on derivative instrument |  | (25000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on disposal of equity method investment | (1171760) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Relief of indebtedness income | (1697024) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued interest added to notes payable and convertible debt | 102451 | 97034 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 8838 | 22331 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, administrative fees | 10500 | (4500) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses | 1086 | 17151 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 28374 | 55773 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | - | 76230 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | (110493) | (170192) |
| Cash flows from investing activities: |  |  |
| &nbsp;&nbsp;&nbsp;Loans made | - | (250000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | - | (250000) |
| Cash flows from financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from issuances of short term notes payable | $105500 | $100000 |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of long term notes payable | - | 275000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 105500 | 375000 |
| Net change in cash | (4993) | (45192) |
| Cash at the beginning of the period | 6099 | 53063 |
| Cash at the end of the period | $1106 | $7871 |
| Supplemental cash flow information: |  |  |
| Cash paid during the period for: |  |  |
| &nbsp;&nbsp;&nbsp;Interest | $1094 | $883 |
| Supplemental Non-Cash Investing and Financing Activities: |  |  |
| &nbsp;&nbsp;&nbsp;Interest capitalized to notes payable | $36000 | $97034 |
| &nbsp;&nbsp;&nbsp;Settlement of long term notes payable | $2997025 | $- |
| &nbsp;&nbsp;&nbsp;Settlement of derivative liability, net of interest | $614000 | $- |

---

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

**NOVELSTEM INTERNATIONAL CORP.**

**NOTES TO CONDENSED FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE 1—NATURE OF OPERATIONS**

Description of Business

NovelStem International Corp. ("NovelStem" or the "Company") is a holding company whose principal assets consisted of an approximate 31% equity interest in NewStem Ltd, an Israeli biotech company ("NewStem") and its developed technology, and a 50% equity interest in NetCo Partners ("NetCo"). The interest in NetCo was sold in May 2025 in a noncash transaction which settled significant debt of the Company in the form of a litigation funding agreement. NovelStem was formerly known as Hollywood Media Corp. The Company was incorporated in the State of Florida on January 22, 1993 and changed its name to NovelStem International Corp. in September 2018.

NewStem focused on the development and commercialization of diagnostic technology that can predict patients' anti-cancer drug resistance, allowing for targeted cancer treatments and the potential to reduce resistance to chemotherapy.

NetCo is a legacy media business interest which owns "Net Force", a book publishing franchise.

Going Concern, Liquidity and Management's Plans

Since inception, the Company has accumulated a deficit of approximately $294,000,000. The accumulated deficit of the Company subsequent to its business focus shift and name change in September 2018 is approximately $7,130,000 which is comprised primarily of allocated losses from equity method investments and general and administrative costs incurred by the Company.

The Company will need to obtain additional funds to continue its operations. Management's plans with regard to these matters include additional financing and fundraising as well as monetization of assets held related to equity method investments. Specifically, the Company sold its interest in NetCo to its joint venture partner in a transaction that satisfied the related debt (litigation funding agreement). Also, the Company is working with former NewStem management to monetize the technology of NewStem and has an agreement in place to receive up to $3,750,000 of any monetization of these licenses and related intangible assets. Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient cash from financing on terms acceptable to the Company, or that the Company will realize any value from the intangible assets or technology of NewStem, which is currently in the process of liquidation due to its inability to raise funds for continued operations (see Note 3).

The Company has in place a finance agreement with two individuals who are shareholders and directors under which it borrowed $750,000 and an additional finance agreement with a shareholder under which it borrowed $300,000 for working capital needs (see Note 4). Additionally, the Company entered into additional finance agreements with unrelated parties in December 2023 and April 2024 under which it borrowed an additional $450,000 for working capital needs and to fund NewStem (see Note 4). All funds available pursuant to these agreements have been received. During the six months ended June 30, 2025, a shareholder and director advanced $105,500 to the Company as an interim bridge loan to fund ongoing expenses. The Company will need to obtain additional funds to continue operations for the next 12 months.

On May 9, 2025, the Company entered into a Settlement Agreement and Release whereby the investment in NetCo was monetized to settle the litigation funding liability to Omni Bridgeway in full. See Note 8.

In view of the matters described above, the Company's ability to meet financing requirements is dependent upon the ability to complete additional fundraising or obtain additional financing, and/or monetize the intangible assets of NewStem. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.

**NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**Basis of Presentation**

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the unaudited condensed financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. Certain information and footnote disclosures normally included in the Company's annual financial statements prepared in accordance with GAAP have been condensed or omitted. These condensed consolidated financial statement results are not necessarily indicative of results to be expected for the full fiscal year or any future period.

The accompanying unaudited condensed financial statements and related disclosures have been prepared with the presumption that users of the unaudited condensed financial statements have read or have access to the audited financial statements for the preceding fiscal year. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the Company's Form 10-K, which was filed with the United States Securities and Exchange Commission ("SEC") on April 7, 2025, from which the Company derived the balance sheet data at December 31, 2024.

Certain information and footnote disclosures normally included in condensed financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations for interim reporting. The Company believes that the disclosures contained herein are adequate to make the information presented not misleading. These condensed financial statements should be read in conjunction with the Company's Form 10-K filed with the Securities and Exchange Commission on April 7, 2025 for the years ended December 31, 2024 and 2023.

**Equity Investments**

Investee companies that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity method of accounting. Whether or not the Company exercises significant influence with respect to an Investee depends on an evaluation of several factors, including, among others, representation on the investee company's board of directors and ownership level, which is generally a 20% to 50% interest in the voting securities of the Investee company. Under the equity method of accounting, an investee company's accounts are not reflected within the Company's balance sheets or statements of operations; however, the Company's share of the earnings or losses of the investee company is reflected in the caption "Equity in net income (loss) of investee company" in the statements of operations. The Company's carrying value in an equity method investee company is reflected in the caption "Investment in Investee company" in the Company's Balance Sheets.

The Company reviews equity investments for impairment on an annual basis, or earlier if events or changes in circumstances indicate that the carrying amounts might not be recoverable.

The Company holds a minority investment in an entity, NewStem, which is accounted for pursuant to the equity method of accounting. Additionally, until May 9, 2025 the Company was a 50% joint venture partner in NetCo which was accounted for pursuant to the equity method of accounting. See Note 3.

**Reclassifications**

Accrued interest of $30,903 has been reclassified from accrued expenses on the balance sheet to be presented as part of the related notes payable balance as of June 30, 2025.

**Derivative Financial Instruments**

The Company had in place a financial instrument, in the form of a note payable, which included an identified embedded derivative in the form of a guarantee. The identified embedded derivative was bifurcated and accounted for separately. Such derivative financial instruments are measured at fair value at each financial statement reporting date. If the fair value of a financial liability (the derivative) exceeds the proceeds received for the issuance of a hybrid instrument in an arm's length transaction with no rights or privileges that require separate accounting recognition as an asset identified, then the embedded derivative is recorded at fair value with the excess of fair value over proceeds recognized as a loss in earnings. During the six months ended June 30, 2024, the Company recognized a gain on derivative financial instruments of $25,000. Proceeds from the note payable are shown as cash from financing instruments and the gain on derivative instrument is included as an adjustment to reconcile loss to net cash used in operating activities in the statements of cash flows for the six months ended June 30, 2025 and 2024. The financial instrument was amended on May 16, 2025 to remove the guarantee and replace the guarantee with fixed interest of $36,000. This amendment terminated the embedded derivative and pursuant to ASC 470 for troubled debt restructuring with a related party, the Company recognized a gain on derivative financial instruments of $650,000 as an equity transaction during the six months ended June 30, 2025.

**Basic and Diluted Net Income (Loss) Per Share**

Basic net income (loss) per share is computed by dividing the net loss by the weighted average number of shares outstanding during the period, excluding treasury stock. Diluted net loss per share is computed by dividing the net loss by the weighted average number of shares outstanding plus the dilutive potential of common shares which would result from the exercise of stock options and warrants. The dilutive effects of stock options and warrants are excluded from the computation of diluted net income (loss) per share if the effect of doing so would be antidilutive.

The following data represents the amounts used in computing earnings per share and the effect on income (loss) and the weighted average number of shares of dilutive potential common stock (unaudited):

SCHEDULE OF AMOUNTS USED IN COMPUTING EARNINGS PER SHARE AND EFFECT ON LOSS AND WEIGHTED AVERAGE NUMBER OF SHARES

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** |
| Net income (loss) attributable to common shareholders | $2546625 | $(605905) |
| Weighted average shares outstanding: |  |  |
| -Basic | 46881475 | 46881475 |
| Basic net income (loss) per share | $0.05 | $(0.01) |
| Net income (loss) attributable to common shareholders | $2546625 | $(605905) |
| Effect of dilutive securities: |  |  |
| &nbsp;&nbsp;&nbsp;Convertible debt, interest | 5950 | - |
| &nbsp;&nbsp;&nbsp;Net income (loss) attributable to common shareholders, dilutive basis | $2552575 | $(605905) |
| Weighted average shares outstanding: |  |  |
| -Basic | 46881475 | 46881475 |
| Add: Convertible debt | 881508 |  |
| Add: Stock options | - | - |
| -Diluted | 47762983 | 46881475 |
| Diluted net income (loss) per share | $0.05 | $(0.01) |

---

Options and warrants excluded from the computation of earnings per share:

SCHEDULE OF OPTIONS AND WARRANTS EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** |
| Warrants |  | 3000000 |
| Stock options | 6360000 | 5760000 |

---

**NOTE 3—EQUITY METHOD INVESTMENTS**

**Investment in NewStem**

In 2018, the Company entered into a Share Purchase Agreement with NewStem and other related parties to provide aggregate funding of up to $4,000,000 to NewStem. This funding was to be provided through the sale of up to 50,000 common shares of NewStem to the Company representing 33% of NewStem's outstanding shares. In 2018, the Company purchased 25,000 shares of NewStem for $2,000,000 acquiring an ownership interest of 20%. The Company made additional investments in 2019 and 2020 purchasing 12,500 shares each year for a $1,000,000 investment each year resulting in an ownership interest of 30.51% as of June 30, 2025 and December 31, 2024.

The Company accounts for its investment in NewStem under the equity method.

NewStem is a development stage company which has incurred losses since its inception and has generated only minimal revenues under a licensing agreement. NewStem is currently in liquidation.

The Company assesses its investment in NewStem for impairment on an annual basis or more frequently if indicators of impairment exist. During the year ended December 31, 2024, indicators of impairment became evident due to the inability of NewStem to raise funds. Due to the inability to raise funds, NewStem has been unable to continue operations and is in the process of liquidation. The intangible assets of NewStem, including license agreements, have reverted to the licensor, Yissum (the commercial division of Hebrew University). The Company has reached an agreement with Yissum regarding the potential monetization of these intangible assets which provides for the Company to receive up to $3,750,000 in the event of re-licensing or monetizing the licenses or related technology developed by NewStem. Due to the current uncertainty of the timing of recovery of any value from these intangible assets and the liquidation status of NewStem, the Company has fully impaired the investment in NewStem and reduced the carrying value to zero ($0) at June 30, 2025 and December 31, 2024.

During the year ended December 31, 2024, the Company signed an agreement (the "Purchase Agreement") to acquire the remainder of NewStem in exchange for shares of Company stock as well as funding for NewStem operations. In anticipation of this transaction, the Company advanced $250,000 to NewStem in December 2023 and an additional $250,000 in March 2024. The related note agreement bears no interest and was payable on December 30, 2024. The agreement provided for discharge of the note upon the closing of the anticipated acquisition transaction. The Purchase Agreement was not fully consummated, and no Company shares were issued to NewStem shareholders in exchange for NewStem shares, therefore the note was not discharged. The Company determined that collection of the note was unlikely due to NewStem's liquidation status and lack of assets. As such, the Company wrote the note off as a bad debt during the year ended December 31, 2024.

During the six and three months ended June 30, 2024, the Company recorded a reimbursement due to NewStem of approximately $44,000 and $8,000, respectively, for audit and accounting related costs which was offset against the note receivable from NewStem.

The following table represents the Company's investment in NewStem:

SCHEDULE OF INVESTMENTS

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30, 2025** | **Year Ended December 31, 2024** |
|  | **(Unaudited)** |  |
| Investment in NewStem, beginning | $- | $1784234 |
| Allocation of net loss from NewStem, Ltd. | - | (155577) |
| Investment in NewStem before impairment |  | 1628657 |
| Impairment loss recorded | - | (1628657) |
| Investment in NewStem, ending | $- | $- |

---

The results of operations of the Company's investment in NewStem is summarized below (unaudited):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Condensed income statement information: |  |  |  |  |
| Net revenues | $- | $- | $- | $- |
| Gross margin | $- | $- |  |  |
| Net loss | $- | $(345000) | $- | $(175000) |
| Company's allocation of net loss from NewStem, Ltd. | $- | $(105243) | $- | $(53384) |

---

The financial position of the Company's investment in NewStem is summarized below:

---

| | | |
|:---|:---|:---|
|  | **As of** | **As of** |
|  | **June 30,**<br>**2025** | **December 31,**<br>**2024** |
|  | **(Unaudited)** | |
| Condensed balance sheet information: |  |  |
| Current assets | $- | $100000 |
| Non-current assets | $- | $2000 |
| Current liabilities | $- | $548000 |
| Non-current liabilities | $- | $- |

---

**Investment in NetCo**

As of December 31, 2024, NovelStem owned a 50% interest in NetCo, a joint venture that owns the Net Force publishing franchise. On May 9, 2025, the Company entered into a Settlement Agreement and Release whereby the investment in NetCo was sold to the Company's JV partner for $1,300,000 to settle the related litigation funding liability to Omni Bridgeway in full. This transaction was fully consummated as funds were received by Omni Bridgeway from CP Partners pursuant to the terms of the agreement.

The Company accounted for its investment in NetCo under the equity method and recognized nominal royalties and administrative fees from this arrangement. The Company assessed its investment in NetCo for impairment on an annual basis or more frequently if indicators of impairment exist.

The following table represents the Company's investment in NetCo:

SCHEDULE OF INVESTMENTS

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30, 2025** | **Year Ended December 31, 2024** |
|  | **(Unaudited)** |  |
| Investment in NetCo, beginning | $128240 | $133709 |
| Allocation of net income (loss) from NetCo | 340 | (5469) |
| Distribution from NetCo | (340) |  |
| Sale of ownership interest in NetCo | (128240) | - |
| Investment in NetCo, ending | $- | $128240 |

---

The results of operations of the Company's investment in NetCo is summarized below (unaudited):

SCHEDULE OF OPERATIONS AND FINANCIAL POSITION INVESTMENT

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Condensed income statement information: |  |  |  |  |
| Net sales | $- | $373 | $- | $- |
| Gross margin | $(79) | $310 | $- | $(63) |
| Net income | $680 | $(5840) | $680 | $(3138) |
| Company's allocation of net income from NetCo | $340 | $(2920) | $340 | $(1569) |

---

The financial position of the Company's investment in NetCo is summarized below:

---

| | | |
|:---|:---|:---|
|  | **As of** | **As of** |
|  | **June 30,**<br>**2025** | **December 31,**<br>**2024** |
|  | **(Unaudited)** | |
| Condensed balance sheet information: |  |  |
| Current assets | $- | $1305 |
| Non-current assets | $- | $272799 |
| Current liabilities | $- | $10748 |
| Non-current liabilities | $- | $- |

---

**NOTE 4—NOTES PAYABLE**

In December 2023, the Company entered into two short-term notes payable with unrelated parties, Hewlett Fund and AIGH Investment Partners, LLC. The notes are for $125,000 each, for a total of $250,000 in borrowings utilized for the funding of NewStem. The notes bear interest at 12% per annum and originally matured on December 21, 2024. The maturity date for both notes has been extended until December 21, 2025, at which time all principal and accrued interest are due and payable. The note agreements include a provision whereby, in the event of a capital raise transaction by the Company, the note holders would be entitled to participate in the transaction in an amount equal to 133% of the amounts owed on the note agreements at the closing of the transaction. Interest expense related to these notes was $14,876 and $7,479, respectively, for the six and three months ended June 30, 2025.

Long-term notes payable are summarized as follows:

SCHEDULE OF LONG TERM NOTES PAYABLE

---

| | | |
|:---|:---|:---|
|  | **As of** | **As of** |
|  | **June 30,**<br>**2025** | **December 31,**<br>**2024** |
|  | **(Unaudited)** | |
| **Notes payable related parties:** |  |  |
| &nbsp;&nbsp;&nbsp;Notes payable director and Executive Chairman | $821766 | $821766 |
| &nbsp;&nbsp;&nbsp;Accrued interest added to note balance | 81166 | 38392 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total notes payable director and Executive Chairman | 902932 | 860158 |
| &nbsp;&nbsp;&nbsp;Note payable shareholder, principal amount | 300000 | 300000 |
| &nbsp;&nbsp;&nbsp;Accrued interest added to note balance | 36000 |  |
| &nbsp;&nbsp;&nbsp;Less unamortized discount | - | (60417) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total note payable shareholder | 336000 | 239583 |
| **Note payable, litigation funding agreement:** |  |  |
| &nbsp;&nbsp;&nbsp;Note payable Omni Bridgeway (Fund 4) Invt. 3 L.P. |  | 2819196 |
| &nbsp;&nbsp;&nbsp;Accrued interest added to agreement balance | - | 140429 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total note payable, litigation funding agreement | - | 2959625 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total notes payable | 1238932 | 4059366 |
| &nbsp;&nbsp;&nbsp;Less current portion | (1238932) | (4059366) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term notes payable | $- | $- |

---

In May 2022, the Company entered into note agreements with Jan Loeb, our Executive Chairman and Jerry Wolasky, a shareholder and member of the Board, to borrow up to an aggregate of $600,000 for working capital needs. The note agreements were amended in March 2024 to increase the total borrowing to $650,000 and extend the maturity date. The note agreements were refinanced in August 2024 providing for total borrowings of $750,000. The agreements provide for interest at a rate of 10% per annum and mature December 31, 2025. As of the date of these financial statements, the full amount of $750,000 has been funded pursuant to these agreements. Interest expense related to these agreements was $42,774 and $22,511 for the six and three months ended June 30, 2025, respectively.

On May 5, 2023, the Company entered into a long-term note payable with a shareholder for $300,000 in financing to be funded $150,000 at inception and $150,000 in October 2023. This note bore interest at zero percent (0%) and originally matured on May 5, 2025. The note included a guarantee which was identified as an embedded derivative with a fair value of a liability of $650,000 at December 31, 2024 which is reported separately on the balance sheet. The fair value of the note exceeded the proceeds, and the note was discounted at inception so that the net liability was the fair value of the derivative. Accretion of the note discount of $60,417 and $16,769, respectively, has been reflected as part of interest expense in the statement of operations for six and three months ended June 30, 2025. This note agreement was amended in May 2025 to provide for a fixed amount of interest in lieu of the guarantee and to extend the maturity date to September 30, 2025. This amendment, which was determined to be accounted for pursuant to the provisions of ASC 470 for troubled debt restructurings with related parties, ended the discounting of the note and the separate recording of an embedded derivative, as the note now bears interest and contains no identifiable embedded derivative. As such, the relief of the guarantee was recorded as an adjustment to equity in the accompanying financial statements. Additionally, as a result of this amendment, interest expense of $36,000 was accrued and treated as a reduction to equity during the six and three months ended June 30, 2025.

**Note Payable, Litigation Funding Agreement**

On February 11, 2022, the Company entered into a nonrecourse litigation funding agreement (the "Agreement") with Omni Bridgeway (Fund 4) Invt. 3 L.P. ("Omni") related to an arbitration proceeding disclosed in Note 7. The Agreement provided for Omni to fund all costs related to the arbitration up to $1,000,000 in exchange for an assignment of a certain portion of rights to and interest in claims related to this arbitration. The agreement provided for specific calculations of the portion of any claims collected to be received by Omni with the remainder collectible by the Company. Additionally, the agreement provided for repayment of funded costs pursuant to the same multiple calculations in the event of a favorable outcome that does not include the collection of claims.

During July 2023, the arbitration was settled. As a result of the ruling disclosed in Note 7, the liability became probable and reasonably estimable, and the Company recorded the full liability due to Omni as of December 31, 2023. This liability consists of expenses funded by Omni of $933,065, including $310,000 advanced for working capital, and related fees or investment return to Omni calculated as contractual multiples of funding totaling $1,886,131 as of December 31, 2023 for a total liability of $2,819,196. This agreement bore interest at 5% per annum beginning January 2024 and was payable in full on January 10, 2025. The Company accrued interest related to the Agreement of $37,400 during the six and three months ended June 30, 2025.

The Company began negotiations for settlement of this Agreement during 2024 and on May 9, 2025, the Company entered into a Settlement Agreement and Release with our JV partner in NetCo, C.P. Group, and Omni whereby our interest in NetCo was sold in exchange for funds of $1,300,000 which were paid directly to Omni by CP Group in full settlement and release of all liabilities related to the Litigation Funding Agreement.

**Bridge Loan**

During the three months ended March 31, 2025, Jan Loeb, Executive Chairman, began advancing funds to the Company for operating expenses in the form of an interim bridge loan until alternate funding sources can be found. The Company is accruing interest at 10% per annum for these advances. The total advanced during the six months ended June 30, 2025 was $105,500. Interest expense related to these advances was $1,452 and $1,022, respectively, during the six and three months ended June 30, 2025.

**Convertible Debt**

In April 2024, the Company borrowed $100,000 from unrelated parties pursuant to convertible debt agreements accounted for as debt. These agreements bear interest at 10% per annum and mature December 30, 2025. The unpaid principal balance of these notes and any accrued interest may be converted into shares of the Company's common stock at a conversion price of $0.13 per share. Interest expense related to these agreements was $5,950 and $2,992, respectively, during the six and three months ended June 30, 2025.

**NOTE 5—EQUITY**

(a) General

At June 30, 2025 and December 31, 2024, the Company had issued 50,316,672 shares and had 46,881,475 shares of its common stock outstanding with a par value $0.01 per share. Holders of outstanding common stock are entitled to receive dividends when, as and if declared by the Board and to share ratably in the assets of the Company legally available for distribution in the event of a liquidation, dissolution or winding up of the Company.

(b) Summary Employee Option Information

The Company's stock option plan provides for the grant to officers, directors, third party contractors and other future key employees of options to purchase shares of common stock. The purchase price may be paid in cash or, if the option is "in-the-money", it is automatically exercised "net". In a net exercise of an option, the Company does not require a payment of the exercise price of the option from the optionee but reduces the number of shares of common stock issued upon the exercise of the option by the smallest number of whole shares that has an aggregate fair market value equal to or in excess of the aggregate exercise price for the option shares covered by the option exercised. Each option is exercisable to one share of the Company's common stock. Most options expire within six years from the date of the grant and generally vest on the first anniversary date of their issuance. Pursuant to the Equity Incentive Plan the Company's board of directors approved on November 12, 2018, an aggregate of 6,360,000 options have been issued to directors and investor relations professionals as of June 30, 2025.

The Company utilized the Black-Scholes option-pricing model to estimate fair value, utilizing the following assumptions for the options issued during the six months ended June 30, 2024 (all in weighted averages):

SCHEDULE OF FAIR VALUE OF OPTION USING VALUATION ASSUMPTIONS

---

| | |
|:---|:---|
|  | **Six Months Ended June 30, 2024** |
| Risk-free interest rate | 4.3% |
| Expected term of options, in years | 5.00 |
| Expected annual volatility | 116.9% |
| Expected dividend yield | 0% |
| Determined weighted average grant date fair value per option | $0.06 |

---

No options were issued during the six months ended June 30, 2025.

The expected term of the options represents an estimate of the length of time until the expected date of exercising the options. Options granted have a maximum life of 7 years. With respect to determining expected exercise behavior, the Company has grouped its option grants into certain groups to track exercise behavior and establish historical rates. The Company estimated volatility by considering historical stock volatility over the expected term of the option. The risk-free interest rates are based on the U.S. Treasury yields for a period consistent with the expected term. The dividend yield of 0% is based on the Company's history and expectation of dividend payout. The Company has not paid and does not anticipate paying dividends in the near future.

(c) Summary Option Information

A summary of the Company's option plans for the six months ended June 30, 2025, is presented below (unaudited):

SCHEDULE OF STOCK OPTION ACTIVITIES

---

| | | |
|:---|:---|:---|
|  | Number<br>of<br>Options<br>(in shares) | Weighted<br>Average<br>Exercise<br>Price |
| Outstanding, December 31, 2024 | 6360000 | $0.14 |
| Granted | - | - |
| Outstanding, June 30, 2025 | 6360000 | $0.14 |
| Exercisable, June 30, 2025 | 6360000 | $0.14 |

---

Stock-based compensation expense was $8,838 and $97 in the six and three months ended June 30, 2025, respectively.

The total compensation cost related to non-vested awards not yet recognized was approximately $27,000 as of June 30, 2024. As of June 30, 2024, 600,000 options were unvested. These options vested in April 2025. There was no unrecognized compensation cost related to non-vested awards as of June 30, 2025.

(d) Warrants

The Company has issued warrants at exercise prices equal to or greater than the market value of the Company's common stock at the date of issuance. A summary of warrant activity follows (unaudited):

SUMMARY OF WARRANTS ACTIVITY

---

| | | |
|:---|:---|:---|
|  | Number of<br>shares<br>underlying<br>warrants | Weighted<br>Average<br>Exercise<br>Price |
| Outstanding, December 31, 2024 | 3000000 | $0.12 |
| Granted |  |  |
| Exercised |  |  |
| Forfeited or expired | 3000000 | $(0.12) |
| Outstanding, June 30, 2025 | 0 | - |

---

The warrant agreements were amended on May 12, 2023 to extend the expiration date to June 28, 2025. The warrants expired on June 28, 2025.

**NOTE 6—INCOME TAXES**

The Company's income tax provision differs from the expense that would result from applying statutory rates to income (loss) before taxes. A reconciliation of the provision (benefit) for income taxes with amounts determined by applying the statutory U.S. federal income tax rate to income before income taxes is as follows (unaudited):

SCHEDULE OF INCOME BEFORE INCOME TAXES

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2025** | **2024** | **2024** |
|  | **Amount** | **Tax Rate** | **Amount** | **Tax Rate** |
| Computed tax at the federal statutory rate of 21% | $534720 | 21.00% | $(127240) | 21.00% |
| State income taxes, net of federal income tax benefit | 36900 | 4.35% | (26327) | 4.35% |
| Change in federal valuation allowance | (215245) | (11.35)% | 170406 | (28.73)% |
| Permanent difference - relief of indebtedness income | (356375) | (14.00)% |  |  |
| Foreign rate differential | - | 0.00% | (16839) | 3.38% |
| &nbsp;&nbsp;&nbsp;Total provision for income tax | $- | 0.00% | $- | 0.00% |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** |
|  | **2025** | **2025** | **2024** | **2024** |
|  | **Amount** | **Tax Rate** | **Amount** | **Tax Rate** |
| Computed tax at the federal statutory rate of 21% | $578235 | 21.00% | $(63551) | 21.00% |
| State income taxes, net of federal income tax benefit | 45904 | 4.35% | (13149) | 4.35% |
| Change in federal valuation allowance | (267764) | (9.72)% | 85242 | (28.80)% |
| Permanent difference - relief of indebtedness income | (356375) | (12.94)% |  | 0.00% |
| Foreign rate differential | - | 0.00% | (8542) | 3.45% |
| &nbsp;&nbsp;&nbsp;Total provision for income tax | $- | 0.00% | $- | 0.00% |

---

**NOTE 7—COMMITMENTS AND CONTINGENCIES**

The Company was the claimant in an arbitration proceeding against their 50% partner in NetCo. The Company initiated the arbitration proceeding in an effort to maximize the total potential value to be derived from fully utilizing the NetCo intellectual property across publishing, entertainment, digital media, merchandising and other ancillary markets. Arbitration hearings were held at the end of July 2022. Arbitration proceedings for the joint owners of NetCo concluded during 2022 and the arbitrator rendered a decision in July 2023. The arbitrator ruled against the Company on certain key issues of the arbitration and in the Company's favor on two key issues of the arbitration.

The Arbitrator ruled in NovelStem's favor on the issue of contract interpretation of the Netco Partners JV Agreement. The Arbitrator also found that the Company's joint venture partner failed to use "reasonable, good faith efforts" to license and exploit the Net Force concept, in breach of its contractual obligations under the Netco Partners' Joint Venture Agreement. The Arbitrator confirmed NovelStem's contractual right to use Tom Clancy's name as a possessory credit in the Net Force title (Tom Clancy's Net Force).

As a result of this ruling, the costs related to the litigation funding agreement disclosed in Note 4 were recognized and a total liability of $2,819,196 was recorded.

**NOTE 8—SUBSEQUENT EVENTS**

The Company evaluated subsequent events through the date these financial statements were available to be issued and filed with the SEC.

In July 2025, the Company borrowed additional funds totaling $18,000 from the Executive Chairman pursuant to the interim bridge loan disclosed in Note 4.

**NOVELSTEM INTERNATIONAL CORP.**

---

| | |
|:---|:---|
| **ITEM 2.** | **MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS** |

---

Statements in the following discussion and throughout this Form 10-Q that are not historical in nature are "forward-looking statements." You can identify forward-looking statements by the use of words such as "expect," "anticipate," "estimate," "may," "will," "should," "intend," "believe," and similar expressions. Although we believe the expectations reflected in these forward-looking statements are reasonable, such statements are inherently subject to risk and we can give no assurances that our expectations will prove to be correct. Actual results could differ from those described in this Form 10-Q because of numerous factors, many of which are beyond our control. We undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this Form 10-Q or to reflect actual outcomes.

**Overview**

We are a development stage company and reported net income (losses) of approximately $2,547,000 and $(606,000) for the six months ended June 30, 2025 and 2024, respectively, and $2,754,000 and $(303,000), for the three months ended June 30, 2025 and 2024. We had current assets of approximately $15,000 and current liabilities of $1,990,000 as of June 30, 2025. As of December 31, 2024, our current assets and current liabilities were approximately $32,000 and $5,304,000, respectively. The decrease in current liabilities is primarily due to the settlement of our litigation funding agreement with Omni in conjunction with the sale of our JV interest in NetCo.

We have prepared our financial statements for the six months ended June 30, 2025 assuming that we will continue as a going concern. Our continuation as a going concern is dependent upon our ability to work with Yissum to monetize the former NewStem license agreement and intangible assets and the continuing financial support from our shareholders as well as obtaining additional outside funding. Our sources of capital in the past have included the sale of equity and our equity securities, which include common stock sold in private transactions, large alternative minimum tax refunds, and related party debt as well as debt from unrelated parties.

NewStem was a development stage Israeli biotech limited liability company focused on pioneering intellectual property related to haploid human embryonic stem cells for the development of personalized diagnostics and therapeutics for genetic and epigenetic diseases. NewStem incurred losses related to in process research and development since inception and the Company records our percentage allocation of these net losses as incurred. NewStem is in the process of liquidation, and we have recorded a full impairment loss on our investment in NewStem.

**RESULTS OF OPERATIONS**

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes thereto and other financial information appearing elsewhere in this Form 10-Q. In the discussion below, general and administrative expenses are referred to as "G&A expenses".

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** |
|  | **2025** | **2024** | **Change** | **2025** | **2024** | **Change** |
| Administrative fee income | $- | $6000 | $(6000) | $- | $3000 | $(3000) |
| Operating expenses: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | 158537 | 327336 | (168799) | 63964 | 144030 | (80066) |
| &nbsp;&nbsp;&nbsp;Total operating expenses | 158537 | 327336 | (168799) | 63964 | 144030 | (80066) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss from operations | (158537) | (321336) | 162799 | (63964) | (141030) | 77066 |
| Other (income) expenses: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Gain on derivative instrument |  | (25000) | (25000) |  |  |  |
| &nbsp;&nbsp;&nbsp;Gain on disposal of equity method investment | (1171760) |  | (1171760) | (1171760) |  | (1171760) |
| &nbsp;&nbsp;&nbsp;Relief of indebtedness income | (1697024) |  | (1697024) | (1697024) |  | (1697024) |
| &nbsp;&nbsp;&nbsp;Interest expense | 163962 | 201406 | (37444) | 51319 | 106642 | (55323) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other (income) expenses | (2704822) | 176406 | (2881228) | (2817465) | 106642 | (2924107) |
| &nbsp;&nbsp;&nbsp;Income (loss) before income taxes | 2546285 | (497742) | 3044027 | 2753501 | (247672) | 3001173 |
| Provision for income tax | - | - | - | - | - | - |
| &nbsp;&nbsp;&nbsp;Income (loss) before equity in net income (loss) of equity method investees | 2546285 | (497742) | 3044027 | 2753501 | (247672) | 3001173 |
| Equity in net income (loss) of equity method investees | 340 | (108163) | 108503 | 340 | (54953) | 55293 |
| &nbsp;&nbsp;&nbsp;Net income (loss) | $2546625 | $(605905) | $3152530 | $2753841 | $(302625) | $3056466 |

---

We are a holding company whose primary asset is our ownership of an equity interests in NewStem including the technology of NewStem. We conduct no other business and as a result, we have no operating revenue or cost of revenue. We did charge annual administrative fees to an affiliated entity through the year ended December 31, 2024.

The Company incurs G&A expenses primarily related to professional fees, insurance and stock-based compensation. We incurred G&A expenses of approximately $159,000 and $327,000 for the six months ended June 30, 2025 and 2024, respectively. Specifically, professional fees decreased by approximately $149,000 in the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, primarily due to a decrease in legal fees and audit fees for NewStem. We incurred a bad debt expense during the six months ended June 30, 2025 of approximately $9,500 for the write off of uncollectible administrative fees. We had reductions in insurance expense and stock compensation of approximately $14,000 and $13,000, respectively. Other miscellaneous G&A expenses decreased by approximately $2,000.

The Company incurs G&A expenses primarily related to professional fees, insurance and stock-based compensation. We incurred G&A expenses of approximately $64,000 and $144,000 for the three months ended June 30, 2025 and 2024, respectively. Specifically, professional fees decreased by approximately $63,000 in the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to a decrease in legal fees and audit fees for NewStem. We had reductions in insurance expense and stock compensation of approximately $7,000 and $8,700, respectively. Other miscellaneous G&A expenses decreased by approximately $1,300.

Interest expense decreased by approximately $37,000 and $55,000 in the six and three months ended June 30, 2025 as compared to the six and three months ended June 30, 2024 due to the settlement of the Omni litigation funding agreement.

The Company has recorded no income tax expense as we have incurred operating losses until the current period during which loss carryforwards are being utilized and all deferred tax assets are fully offset by an income tax valuation allowance.

We reported net income from equity method investees during the six and three months ended June 30, 2025 which consists of income from NetCo of $340.

We reported net losses from equity method investees during the six and three months ended June 30, 2024 which included losses from NetCo of $2,920 and $1,569 and losses from NewStem of $105,243 and $53,384, respectively.

**Liquidity and Capital Resources**

We have not paid dividends on our common stock since our name change and business focus shift in 2018. Our present policy is to apply cash to investments in product development at NewStem, acquisitions or expansion; consequently, we do not expect to pay dividends on common stock in the foreseeable future.

The Company will need to obtain additional funds to continue its operations. Management's plans with regard to these matters include fundraising until our interest in NewStem's technology is profitable. Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient cash from financing on terms acceptable to the Company, or that NewStem's technology will be monetized and become profitable.

In May 2022, the Company entered into note agreements with Jan Loeb, our Executive Chairman and Jerry Wolasky, a member of the Board, to borrow up to an aggregate of $600,000 for working capital needs. The note agreements were amended in March 2024 to increase the total borrowing to $650,000 and extend the maturity date. The agreements provide for interest at a rate of 10% per annum and mature September 1, 2025. As of the date of this Quarterly Report, the full amount of $650,000 has been funded pursuant to these agreements.

During the year ended December 31, 2023, the Company entered into a note agreement with a shareholder to borrow $300,000 for continued working capital. This note bore interest at zero percent (0%) and matured on May 5, 2025. The note included a guarantee which has been identified as an embedded derivative with a fair value of a liability of $650,000 at December 31, 2024. This note was amended in May 2025 to provide for fixed interest, remove the guarantee and extend the maturity date to September 30, 2025.

In December 2023, the Company entered into two short-term notes payable with unrelated parties for a total of $250,000 in borrowings utilized for the funding of NewStem. The notes bear interest at 12% per annum and mature December 21, 2025, at which time all principal and accrued interest are due and payable. The note agreements include a provision whereby, in the event of a capital raise transaction by the Company, the note holders would be entitled to participate in the transaction in an amount equal to 133% of the amounts owed on the note agreements at the closing of the transaction.

In April 2024, the Company borrowed $100,000 from unrelated parties pursuant to convertible debt agreements accounted for as debt.

During the six months ended June 30, 2025, the Company borrowed $105,500 from the executive chairman in the form of an interim bridge loan until alternate funding sources can be found. The Company is accruing interest at 10% per annum for these advances.

On May 9, 2025 the Company sold its interest in NetCo to its JV partner for $1,300,000 which was paid directly to Omni in full settlement of all liabilities related to the litigation funding agreement totaling $2,959,625.

*Net Cash Used In Operating Activities.*

For the six months ended June 30, 2025, net cash used in operating activities was approximately $110,000, which consisted primarily of net income of approximately $2,547,000, offset by noncash disposal of equity method investment of approximately $1,043,000, relief of indebtedness income of approximately $1,697,000, stock-based compensation of approximately $9,000 and interest added to notes payable of approximately $34,000. Additionally, cash was used in operations related to decrease in current assets of approximately $12,000 and a net increase in total accrued liabilities and accounts payables of approximately $28,000.

For the six months ended June 30, 2024, net cash used in operating activities was approximately $170,000, which consisted primarily of a net loss of approximately $606,000, offset by noncash equity in loss of equity method investees of approximately $108,000, accretion of discount on notes payable of approximately $89,000, stock based compensation of approximately $22,000 and interest added to notes payable of approximately $97,000 and reduced by gain on derivative instrument of $25,000. Additionally, cash was used in operations related to an increase in current assets of approximately $13,000 and an increase in accrued liabilities and other payables of approximately $132,000.

*Net Cash Used In Investing Activities.*

During the six months ended June 30, 2024, $250,000 was loaned to NewStem in an investing activity. For the six months ended June 30, 2025, no net cash was used in investing activities.

*Net Cash Provided By Financing Activities.*

For the six months ended June 30, 2025, net cash provided by financing activities was $105,500, consisting of short-term borrowings from the executive chairman.

For the six months ended June 30, 2024, net cash provided by financing activities was $375,000, consisting of long-term borrowings from two directors and a significant stockholder totaling $275,000 and short term borrowings of $100,000.

---

| | |
|:---|:---|
| **ITEM 3.** | **QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK** |

---

This section is not applicable.

---

| | |
|:---|:---|
| **ITEM 4.** | **CONTROLS AND PROCEDURES** |

---

Our Principal Executive Officer and Chief Financial Officer conducted an evaluation of our controls and procedures. We have identified material weaknesses in our internal control and procedures and internal control over financial reporting. If not remediated, our failure to establish and maintain effective disclosure controls and procedures and internal control over financial reporting could result in material misstatements in our financial statements and a failure to meet our reporting and financial obligations, each of which could have a material adverse effect on our financial condition and the trading price of our common stock.

Maintaining effective internal control over financial reporting and effective disclosure controls and procedures are necessary for us to produce reliable financial statements. We have re-evaluated our internal control over financial reporting and our disclosure controls and procedures and concluded that they were not effective as of June 30, 2025 and we concluded there was a material weakness in the design of our internal control over financial reporting as it relates to insufficient resources to employ proper segregation of duties over the processing of transactions and financial reporting.

A material weakness is defined as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

**Changes in Internal Control Over Financial Reporting**

There was no change in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

**PART II**

---

| | |
|:---|:---|
| **ITEM 1.** | **LEGAL PROCEEDINGS** |

---

As noted above, NetCo owns all rights to the "Tom Clancy's Net Force" intellectual property in all media, including film, television, and video games. As part of the joint venture, NetCo has published more than a dozen books and had an ABC miniseries.

After Tom Clancy passed away in 2013, his estate and business partners refused to cooperate in exploiting the intellectual property. After trying to amicably resolve the dispute, the Company initiated arbitration proceedings with the American Arbitration Association. The Company's arbitration demand asserted claims for breach of the joint venture agreement and breach of fiduciary duty. Both claims arise from C.P. Group's failure to make reasonable, good faith efforts to exploit the full array of media rights relating to Net Force. The Company's goal is to maximize the total potential value of the NetCo intellectual property across video games, streaming, digital media, merchandising and other ancillary markets. The Company believes that the value of the intellectual property is significant.

The arbitration evidentiary hearing concluded on October 20, 2022, and the arbitrator ordered the parties to submit post-hearing briefs. Final briefs were filed in January 2023. The Arbitrator ruled in the Company's favor on two key issues of the arbitration and ruled against the Company in other key issues.

The Arbitrator ruled in NovelStem's favor on the issue of contract interpretation of the Netco Partners JV Agreement. The Arbitrator also found that the Company's joint venture partner failed to use "reasonable, good faith efforts" to license and exploit the Net Force concept, in breach of its contractual obligations under the Netco Partners' Joint Venture Agreement. The Arbitrator confirmed NovelStem's contractual right to use Tom Clancy's name as a possessory credit in the Net Force title (Tom Clancy's Net Force). However, the arbitrator did not award any damages to the Company and did not cede operating control of the joint venture to the Company as requested. As such, the Company continues to struggle to maximize the potential of the NetCo asset.

To fund efforts to maximize the value of NetCo, NovelStem has secured non-recourse litigation funding. As a result of this ruling, the costs related to the litigation funding agreement were recognized. All costs related to the litigation and the related litigation funding agreement were recorded by the Company for a total liability of approximately $2,900,000. This liability which totaled approximately $3,000,000, including accrued interest, was settled in full on May 9, 2025.

---

| | |
|:---|:---|
| **ITEM 1A.** | **RISK FACTORS** |

---

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

---

| | |
|:---|:---|
| **ITEM 2.** | **UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Not
 applicable.

(b) Not
 applicable.

(c) Not
 applicable.

---

| | |
|:---|:---|
| **ITEM 3.** | **DEFAULTS UPON SENIOR SECURITIES** |

---

Not applicable.

---

| | |
|:---|:---|
| **ITEM 4.** | **MINE SAFETY DISCLOSURES** |

---

Not applicable.

---

| | |
|:---|:---|
| **ITEM 5.** | **OTHER INFORMATION** |

---

None.

---

| | |
|:---|:---|
| **ITEM 6.** | **EXHIBITS** |

---

---

| | |
|:---|:---|
| #10.13 | [1<sup>st</sup> Amendment to Promissory Note issued to Stephen Gans](ex10-13.htm) |
| #10.14 | [Bridge Note issued to Jan Loeb](ex10-14.htm) |
| #31.1 | [Certification of Principal Executive Officer and Executive Chairman pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](ex31-1.htm) |
| #31.2 | [Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](ex31-2.htm) |
| #32.1 | [Certification of Principal Executive Officer and Executive Chairman pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](ex32-1.htm) |
| #32.2 | [Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](ex32-2.htm) |

---

104 Cover Page Interactive Data File (embedded within the Inline XBRL document).

# This exhibit is filed or furnished herewith.

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **NOVELSTEM INTERNATIONAL CORP.** | **NOVELSTEM INTERNATIONAL CORP.** |
| Date: August 6, 2025 | By: | */s/ Jan Loeb* |
|  | Name: | Jan Loeb |
|  | Title: | Executive Chairman |

---

## Exhibit 10.13

**Exhibit 10.13**

FIRST AMENDMENT TO PROMISSORY NOTE

THIS FIRST AMENDMENT TO PROMISSORY NOTE (the **"Amendment"**), dated as of May 16, 2025, is entered into by NOVELSTEM INTERNATIONAL CORP., a Florida corporation (the **"Maker"**) and Stephen Gans, an individual (the **"Noteholder"**).

WHEREAS, the Maker and the Noteholder are parties to that certain Promissory Note, dated as of May 1, 2023 (the **"Promissory Note"**); and

WHEREAS, the Maker and the Noteholder desire to amend the Promissory Note to remove the Guarantee included in the original Promissory Note and replace it with fixed interest of $36,000 and extend the term of the Promissory Note.

NOW, THEREFORE, for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is hereby agreed by each party hereto as follows:

Amendment to the Promissory Note. It is hereby agreed and understood that the Promissory Note shall be amended as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Guarantee. The following defined term in the Promissory Note is **<u>removed in its entirety</u>**:

**"Guarantee" means that Novelstem will guarantee that the $650,000 equity investment that the Noteholder made in NewStem will be worth at least $650,000 when this note matures.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Applicable Rate. The following defined term:

**"Applicable Rate"** means the rate equal to zero percent (0%). Is replaced with the following:

**"Interest Added to Note Balance"** means the fixed amount of $36,000 for interest incurred is to be added to the note balance of $300,000 effective May 16, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Maturity Date. The paragraph of the Promissory Note entitled "**Maturity Date**" is hereby amended and restated in its entirety to read as follows:

**"Maturity Date"** means the earlier of (a) September 30, 2025 and (b) the date on which all amounts under this Note shall become due and payable pursuant to Section 7.

Miscellaneous:

A. Except as expressly amended and modified by this Amendment, the Promissory Note is and shall continue to be in full force and effect in accordance with the terms thereof.

B. This Amendment may be executed by the parties hereto in counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to the Promissory Note to duly executed as of the day and year first written above.

---

| |
|:---|
| MAKER: |
| NOVELSTEM INTERNATIONAL CORP. |
| */s/ Jan Loeb* |
| Jan Loeb |
| NOTEHOLDER: |
| */s/Stephen Gans* |
| Stephen Gans |

---

## Exhibit 10.14

**Exhibit 10.14**

**BRIDGE NOTE (CONVERTIBLE)**

FOR VALUE RECEIVED, and subject to the terms and conditions set forth herein, Novelstem International Corp, a Florida corporation (the **"Maker"),** hereby unconditionally promises to pay to the order of Jan Loeb or his assigns (the **"Noteholder",** and together with the Maker, the **"Parties"),** the principal amount of Ninety One Thousand Dollars ($91,000) advanced prior to the date of this agreement plus any additional advances thereon (the **"Loan"),** together with all accrued interest thereon, as provided in this Negotiable Promissory Note (the **"Note",** as the same may be amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Definitions.</u> Capitalized terms used herein shall have the meanings set forth in this Section 1.

**"Applicable Rate"** means the rate equal to ten percent (10%).

**"Business Day"** means a day other than a Saturday, Sunday, or other day on which commercial banks in New York City are authorized or required by law to close.

**"Default"** means any of the events specified in Section 6 that constitutes an Event of Default or which, upon the giving of notice, the lapse of time, or both pursuant to Section 6 would, unless cured or waived, become an Event of Default.

**"Default Rate"** means, at any time, the Applicable Rate plus two percent (2%).

**"Event of Default"** has the meaning set forth in Section 6.

**"Governmental Authority"** means the government of any nation or any political subdivision thereof, whether at the national, state, territorial, provincial, municipal, or any other level, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory, or administrative powers or functions of, or pertaining to, government.

**"Law"** as to any Person, means the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law (including common law), statute, ordinance, treaty, rule, regulation, order, decree, judgment, writ, injunction, settlement agreement, requirement or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its properties or to which such Person or any of its properties is subject.

**"Lien"** means any mortgage, pledge, hypothecation, encumbrance, lien (statutory or other), charge, or other security interest.

**"Loan"** has the meaning set forth in the introductory paragraph.

**"Maker"** has the meaning set forth in the introductory paragraph.

**"Maturity Date"** means the earlier of (a) the attainment of alternate financing for the purpose of repaying this note, (b) December 30, 2025 and (c) the date on which all amounts under this Note shall become due and payable pursuant to Section 7.

**"Note"** has the meaning set forth in the introductory paragraph. **"Noteholder"** has the meaning set fo11h in the introductory paragraph. **"Parties"** has the meaning set forth in the introductory paragraph.

**"Person"** means any individual, corporation, limited liability company, trust, joint venture, association, company, limited or general partnership, unincorporated organization, Governmental Authority, or other entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Payment: Optional Prepayments.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 <u>Payment.</u> The aggregate unpaid principal amount of the Loan and all accrued and unpaid interest payable under this Note shall be due and payable on the Maturity Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 <u>Optional Prepayment.</u> The Maker may prepay the Loan in whole or in part at any time or from time to time without penalty or premium by paying the principal amount to be prepaid together with accrued interest thereon to the date of prepayment. No prepaid amount may be reborrowed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Interest</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 <u>Interest Rate</u> Except as otherwise provided herein, the outstanding principal amount of the Loan made hereunder shall bear interest at the Applicable Rate from the date the Loan was made until the Loan is paid in full, whether at maturity, upon acceleration, by prepayment, or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 <u>Default Interest.</u> If any amount payable hereunder is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such overdue amount shall bear interest at the Default Rate from the date of such non-payment until such amount is paid in full.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 <u>Computation of lnterest.</u> All computations of interest shall be made on the basis of 365 or 366 days, as the case may be, and the actual number of days elapsed. Interest shall accrue on the Loan on the day on which such Loan is made and shall not accrue on the Loan on the day on which it is paid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Conversion.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <u>General</u>. The unpaid principal balance of this Note and any accrued interest may be converted into shares of the Company's common stock at a conversion price of $0.09 per share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Payment Mechanics.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <u>Manner of Payment.</u> All payments of interest and principal shall be made in lawful money of the United States of America no later than 5:00 PM on the date on which such payment is due by cashier's check, certified check or by wire transfer of immediately available funds to the Noteholder's account at a bank specified by the Noteholder in writing to the Maker from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <u>Application of Payments.</u> All payments made hereunder shall be applied first to the payment of any fees or charges outstanding hereunder, second to accrued interest, and third to the payment of the principal amount outstanding under the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <u>Business Day Convention.</u> Whenever any payment to be made hereunder shall be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension will be taken into account in calculating the amount of interest payable under this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Representations, Warranties and Covenants.</u> The Maker hereby represents, warrants and covenants to the Noteholder on the date hereof as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 <u>Existence.</u> The Maker is a corporation duly incorporated, validly existing, and in good standing under the laws of the state of its jurisdiction of organization.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 <u>Power and Authority.</u> The Maker has the power and authority, and the legal right, to execute and deliver this Note and to perform its obligations hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 <u>Authorization: Execution and Delivery.</u> The execution and delivery of this Note by the Maker and the performance of its obligations hereunder have been duly authorized by all necessary corporate action in accordance with all applicable Laws. The Maker has duly executed and delivered this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 <u>No Approvals.</u> No consent or authorization of, filing with, notice to, or other act by, or in respect of, any Governmental Authority or any other Person is required in order for the Maker to execute, deliver, or perform any of its obligations under this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5 <u>No Violations.</u> The execution and delivery of this Note and the consummation by the Maker of the transactions contemplated hereby do not and will not (a) violate any provision of the Maker's organizational documents; (b) violate any Law applicable to the Maker or by which any of its properties or assets may be bound; or (c) constitute a default under any material agreement or contract by which the Maker may be bound.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6 <u>Enforceability</u>. The Note is a valid, legal, and binding obligation of the Maker, enforceable against the Maker in accordance with its terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.7 <u>No Subordination</u>. The obligations of the Maker to Noteholder under this Note are not and shall not be subordinated to any other indebtedness or debt of Maker heretofore or hereinafter incurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Events of Default.</u> The occurrence of any of the following shall constitute an Event of Default hereunder:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 <u>Failure to Pay.</u> The Maker fails to pay any payment of principal or interest due hereunder when due; and such failure continues for five (5) days after written notice to the Maker.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 <u>Breach of Representations and Warranties.</u> Any representation or warranty made or deemed made by the Maker to the Noteholder herein is incorrect in any material respect on the date as of which such representation or warranty was made or deemed made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 <u>Bankruptcy.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the Maker commences any case, proceeding or other action (i) under any existing or future law relating to bankruptcy, insolvency, reorganization, or other relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition, or other relief with respect to it or its debts, or (ii) seeking appointment of a receiver, trustee, custodian, conservator, or other similar official for it or for all or any substantial part of its assets, or the Maker makes a general assignment for the benefit of its creditors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) there is commenced against the Maker any case, proceeding, or other action of a nature referred to in clause Section 6.3(a) above which (i) results in the entry of an order for relief or any such adjudication or appointment or (ii) remains undismissed, undischarged, or unbonded for a period of thirty (30) days;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) there is commenced against the Maker any case, proceeding, or other action seeking issuance of a warrant of attachment, execution, or similar process against all or any substantial part of its assets which results in the ent1y of an order for any such relief which has not been vacated, discharged, or stayed or bonded pending appeal within thirty (30) days from the entry thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the Maker takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set fo1ih in clause Section 6.3(a),Section 6.3(b), or Section 6.3(c) above; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the Maker is generally not, or is unable to, or admits in writing its inability to, pay its debts as they become due.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 <u>Judgments.</u> A judgment or decree is entered against the Maker and such judgment or decree has not been vacated, discharged, or stayed or bonded pending appeal within thirty (30) days from the entry thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Remedies.</u>

Upon the occurrence of an Event of Default and at any time thereafter during the continuance of such Event of Default, the Noteholder may at its option, by written notice to the Maker (a) declare the entire principal amount of this Note, together with all accrued interest thereon and all other amounts payable hereunder, immediately due and payable and/or (b) exercise any or all of its rights, powers, or remedies under applicable law; *provided, however* that, if an Event of Default described in Section 6.3 shall occur, the principal of and accrued interest on the Loan shall become immediately due and payable without any notice, declaration, or other act on the part of the Noteholder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 Notices,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All notices, requests, or other communications required or permitted to be delivered hereunder shall be delivered in writing, in each case to the address specified below or to such other address as such Party may from time to time specify in writing in compliance with this provision:

If to the Maker:

2255 Glades Road, Suite 221A

Boca Raton, Florida 33421

Attn: Christine Jenkins, Chief

Financial Officer

Email: <u>cjenkinscpa@outlook.com</u>

If to the Noteholder:

2255 Glades Road, Suite 221A

Boca Raton, Florida 33421

Attn: Jan Loeb

Email: jloeb@leaptidecapital.com

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notices if (i) mailed by certified or registered mail or sent by hand or overnight courier service shall be deemed to have been given when received, (ii) sent by facsimile during the recipient's normal business hours shall be deemed to have been given when sent (and if sent after normal business hours shall be deemed to have been given at the opening of the recipient's business on the next business day), and (iii) sent by e-mail shall be deemed received upon the sender's receipt of an acknowledgment from the intended recipient (such as by the "return receipt requested" function, as available, return e-mail, or other written acknowledgment).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 <u>Governing Law.</u> This Note and any claim, controversy, dispute, or cause of action (whether in contract or tort or otherwise) based upon, arising out of, or relating to this Note and the transactions contemplated hereby, shall be governed by the laws of the State of Florida without regard to any conflict of laws provisions thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3 <u>Waiver of *Jury* Trial.</u> THE MAKER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY *WRY* IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY RELATING TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY WHETHER BASED ON CONTRACT, TORT, OR ANY OTHER THEORY.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4 <u>Counterparts: Integration: Effectiveness.</u> This Note and any amendments, waivers, consents, or supplements hereto may be executed in counterparts, each of which shall constitute an original, but all taken together shall constitute a single contract. This Note constitutes the entire contract between the Parties with respect to the subject matter hereof and supersede all previous agreements and understandings, oral or written, with respect thereto. Delivery of an executed counterpart of a signature page to this Note by facsimile or in electronic (i.e., "pdf" or "tiff") format shall be effective as delivery of a manually executed counterpart of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.5 <u>Successors and Assigns.</u> This Note may be assigned, transferred, or negotiated by the Noteholder to any Person, at any time, without notice to or the consent of the Maker. The Maker may not assign or transfer this Note or any of its rights hereunder without the prior written consent of the Noteholder. This Note shall inure to the benefit of and be binding upon the parties hereto and their permitted assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.6 <u>Waiver of Notice.</u> The Maker hereby waives presentment, demand for payment, protest, notice of dishonor, notice of protest or nonpayment, notice of acceleration of maturity, and diligence in connection with the enforcement of this Note or the taking of any action to collect sums owing hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.7 <u>Amendments and Waivers.</u> No term of this Note may be waived, modified, or amended except by an instrument in writing signed by both of the parties hereto. Any waiver of the terms hereof shall be effective only in the specific instance and for the specific purpose given.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.8 <u>Headings.</u> The headings of the various Sections and subsections herein are for reference only and shall not define, modify, expand, or limit any of the terms or provisions hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.9 <u>No Waiver: Cumulative Remedies.</u> No failure to exercise and no delay in exercising, on the part of the Noteholder, of any right, remedy, power, or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege. The rights, remedies, powers, and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers, and privileges provided by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.10 <u>Severability.</u> If any term or provlsl0n of this Note is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision of this Note or invalidate or render unenforceable such term or provision in any other jurisdiction.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Maker has executed this Note as of this 16th day of May, 2025

---

| |
|:---|
| MAKER: |
| NOVELSTEM INTERNATIONAL CORP. |
| */s/ Christine Jenkins* |
| Christine Jenkins, Chief Financial Officer |
| NOTEHOLDER: |
| */s/ Jan Loeb* |
| Jan Loeb |

---

## Exhibit 31.1

**Exhibit 31.1**

I, Jan H. Loeb, the Principal Executive Officer and Executive Chairman of NovelStem International Corp. certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I
 have reviewed this report on Form 10-Q of NovelStem International Corp.;

2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
 to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
 the period covered by this report;

3. Based
 on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
 respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
 this report;

4. The
 registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures
 (as defined in Exchange Act Rules 13a- 15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
 Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
 to ensure that material information relating to the registrant is made known to us by others within those entities, particularly
 during the period in which this report is being prepared;

(b) Designed
 such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
 supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
 for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated
 the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about
 the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
 and

(d) Disclosed
 in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's
 most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected,
 or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The
 registrant's other certifying officer and l have disclosed, based on our most recent evaluation of internal control over financial
 reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing
 the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All
 significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
 reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information;
 and

(b) Any
 fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's
 internal control over financial reporting.

---

| | |
|:---|:---|
| Dated: August 6, 2025 | Dated: August 6, 2025 |
| By: | */s/ JAN H. LOEB* |
|  | Jan H Loeb |
|  | Principal Executive Officer and Executive Chairman |

---

## Exhibit 31.2

**Exhibit 31.2**

I, Christine T. Jenkins, the Chief Financial Officer of NovelStem International Corp. certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I
 have reviewed this report on Form 10-Q of NovelStem International Corp.;

2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
 to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
 the period covered by this report;

3. Based
 on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
 respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
 this report;

4. The
 registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures
 (as defined in Exchange Act Rules 13a- 15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
 Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
 to ensure that material information relating to the registrant is made known to us by others within those entities, particularly
 during the period in which this report is being prepared;

(b) Designed
 such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
 supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
 for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated
 the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about
 the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
 and

(d) Disclosed
 in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's
 most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected,
 or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The
 registrant's other certifying officer and l have disclosed, based on our most recent evaluation of internal control over financial
 reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing
 the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All
 significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
 reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information;
 and

(b) Any
 fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's
 internal control over financial reporting.

---

| | |
|:---|:---|
| Dated: August 6, 2025 | Dated: August 6, 2025 |
| By: | */s/ CHRISTINE T. JENKINS* |
|  | Christine T. Jenkins |
|  | Chief Financial Officer |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report on Form 10-Q of NovelStem International Corp. (the "Company") for the quarterly period ended June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Jan H. Loeb, Principal Executive Officer and Executive Chairman of the Company, hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The
 Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The
 information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of
 the Company.

---

| |
|:---|
| */s/ Jan H. Loeb* |
| Jan H. Loeb |
| Principal Executive Officer and Executive Chairman |
| August 6, 2025 |

---

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report on Form 10-Q of NovelStem International Corp. (the "Company") for the quarterly period ended June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Christine T. Jenkins, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The
 Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The
 information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of
 the Company.

---

| |
|:---|
| */s/ Christine T. Jenkins* |
| Christine T. Jenkins |
| Chief Financial Officer |
| August 6, 2025 |

---