Zivo Bioscience Inc. Warrant 2023

Company Overview

Business Model: ZIVO BIOSCIENCE, INC. is a research and development company operating in both the biotech and agtech sectors. Its core value proposition is derived from a proprietary intellectual property portfolio encompassing algal and bacterial strains, biologically active molecules and complexes, and advanced production and cultivation techniques. The company's primary revenue generation mechanisms are centered around two initiatives: identifying bioactive extracts or novel bioactive molecules from its proprietary algal culture to treat various diseases (Therapeutic/Biotech), and utilizing its proprietary algal culture in its whole form as a nutritional food product (Nutrition/Agtech). The company aims to generate income through licensing and selling natural bioactive ingredients, including algal biomass and derived products, to human and animal pharmaceutical companies, as well as food, dietary supplement, and skin care manufacturers.

Market Position: In the therapeutic sector, ZIVO BIOSCIENCE, INC. is developing a non-antibiotic product candidate for mitigating coccidiosis in broiler chickens, a market estimated at $1.1 billion in 2024, which has seen limited innovation in the past 60 years. The company positions its product as an immune modulator, offering a novel approach to combat pathogens without the adverse effects of traditional antimicrobial drugs. In the nutrition sector, its proprietary dried algal culture, marketed under the Zivolife brand, is positioned as a high-protein (over 50%), nutrient-rich food or food ingredient with little odor and a mild taste. It is noted as the first algae of its kind in the North American green powder food market, estimated at $4.6 billion in 2023.

Recent Strategic Developments:

• Therapeutic (Biotech): The company has focused its efforts on a product candidate for poultry coccidiosis, conducting 23 clinical trials to date, with the most recent in January 2024. A significant regulatory milestone was achieved with the U.S. Department of Agriculture’s Center for Veterinary Biologics (CVB) claiming jurisdiction for reviewing the immune-modulating biologic, which is expected to provide a favorable timeline to approval. Initial proof of concept studies in December 2024 indicated positive effects of active materials against low pathogenicity avian influenza virus.
• Nutrition (Agtech): ZIVO BIOSCIENCE, INC. entered a long-term collaboration with Grupo Alimenta, a Peruvian agricultural conglomerate, to develop cost-effective, commercial-scale algae growing technology. By early 2023, the Alimenta Algae SAC facility in Peru successfully demonstrated continuous production of high-quality dried algae and passed food safety and cGMP audits, meeting FDA Foreign Supplier Verification Program requirements for import into the United States. In June 2023, ZIVOLife, LLC commenced commercial shipments of the dried green algae powder. A global distribution agreement was established with ZWorldwide, Inc. for selling the Zivolife product in the North American market through an online platform.

Geographic Footprint: ZIVO BIOSCIENCE, INC.'s principal executive office is located in Troy, MI, with a laboratory and office in Fort Myers, FL. Its primary cultivation and contract manufacturing operations for the Zivolife product are located in Peru, through its partnership with Alimenta Algae SAC. The primary market focus for the Zivolife product's introduction is the North American green powder food market.

Financial Performance

Revenue Analysis

Profitability Metrics (2024):

• Gross Margin: 31.1%
• Operating Margin: -8511.5%
• Net Margin: -8513.4%

Investment in Growth:

• R&D Expenditure: $3,134,935 (1993.9% of revenue)
• Capital Expenditures: $0
• Strategic Investments: The company's contract manufacturer, Alimenta Algae SAC, is set to make essential investments in the Peru site to facilitate production scale-up.

Business Segment Analysis

ZIVO BIOSCIENCE, INC. manages its business activities on a consolidated basis and operates in one reportable segment: research and development of microalgae for applications in both the therapeutic and nutritional sectors. The company's Chief Executive Officer, as the Chief Operating Decision Maker, evaluates financial information and allocates resources on a consolidated basis.

Therapeutic (Biotech) Strategy

Financial Performance: Financial performance for this specific strategy is not reported separately from the consolidated segment. Key Growth Drivers: The primary growth driver is the development and commercialization of bioactive extracts, fractions, and molecules derived from proprietary algal culture for human and animal diseases. A key focus is the coccidiosis product candidate for broiler chickens, driven by the widespread prevalence of the disease, the lack of effective non-antibiotic alternatives, and a shorter clinical testing cycle. The company also aims to leverage its immune-modulating properties to combat a broad range of infective pathogens. Product Portfolio:

• Coccidiosis Product Candidate: A non-antibiotic immune modulator for broiler chickens, demonstrated to minimize negative effects on digestive health, reduce incidence of food-borne illness pathogens (Campylobacter, Salmonella, E. coli, Clostridium perfringens), and reduce mortality.
• Avian Influenza: Initial proof of concept study indicated active materials showed positive effects in chickens challenged with a low pathogenicity strain, including reduced viral titers and delayed transmission.
• Bovine Mastitis: Development of a treatment based on previous successful proof of concept studies.
• Canine Joint Health: Studies indicated potential chondroprotective effect from a compound fraction.
• Human Immune Modulation: Early in vitro and in vivo studies indicated a biologically active molecule may serve as an immune modulator. Market Dynamics: The global poultry industry spent approximately $1.1 billion in 2024 on coccidiosis control, primarily using decades-old compounds. Consumer and regulatory pressures are driving demand for non-antibiotic alternatives. The company aims to disrupt this market with its novel non-antibiotic technology.

Nutrition (Agtech) Strategy

Financial Performance: Financial performance for this specific strategy is not reported separately from the consolidated segment. Key Growth Drivers: The development of a cost-effective, commercial-scale growing technology for its proprietary algal culture. The increasing shift toward plant-based diets and consumer demand for healthful and nutritional ingredients to improve overall health and immune response are key market drivers. Product Portfolio:

• Zivolife Dried Green Algae Powder: Contains over 50% protein, an excellent source of other essential vitamins and nutrients, with little odor and a mild taste. Intended for human consumption as a food or food ingredient.
• Companion Animal Food Ingredient: Plans to leverage self-affirmed GRAS status for human consumption into viable food and nutritional supplements for companion animals.
• Skin Health: Developing algal biomass as a skin health ingredient, with topical product testing started in 2020.
• New Dietary Ingredient (NDI): Algal biomass may be sold as a dietary supplement or ingredient, requiring FDA notification and supporting studies. Market Dynamics: The global vegan protein powder market was estimated at $4.6 billion in 2023, driven by plant-based diet trends and health benefits. Zivolife is a new entrant in this growing consumer market.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: None explicitly disclosed.
• Dividend Payments: ZIVO BIOSCIENCE, INC. has never declared or paid any cash dividends on its common stock and does not anticipate doing so in the foreseeable future, planning to retain future earnings for business development and expansion.
• Future Capital Return Commitments: No authorized programs or amounts for future capital returns were disclosed.

Balance Sheet Position (as of December 31, 2024):

• Cash and Equivalents: $1,542,442
• Total Debt: $254,361 (Current portion of note payable: $138,164; Long-term note payable, net of current portion: $116,197)
• Net Cash Position: $1,288,081
• Credit Rating: Not disclosed.
• Debt Maturity Profile: Unsecured promissory notes with an aggregate principal of $277,254 (as of November 12, 2024) are payable in 24 equal monthly installments beginning November 30, 2024, bearing interest at 1.0% per annum.

Cash Flow Generation (Year Ended December 31, 2024):

• Operating Cash Flow: $(4,313,510)
• Free Cash Flow: $(4,313,510) (Operating Cash Flow - Capital Expenditures of $0)
• Cash Conversion Metrics: Not explicitly detailed in the filing.

Operational Excellence

Production & Service Model: ZIVO BIOSCIENCE, INC. employs a contract manufacturing model for its proprietary algae. It has a long-term collaboration with Grupo Alimenta, which, through its subsidiary Alimenta Algae SAC in Peru, cultivates the algae using ZIVO BIOSCIENCE, INC.'s proprietary cultivation process and pond design. ZIVOLife, LLC, a subsidiary of ZIVO BIOSCIENCE, INC., commits to purchasing the entire output from the Alimenta Algae SAC facility. This model focuses on developing cost-effective, commercial-scale growing technology.

Supply Chain Architecture: Key Suppliers & Partners:

• Contract Manufacturer: Alimenta Algae SAC (Peru) - Responsible for commercial-scale cultivation and production of ZIVO BIOSCIENCE, INC.'s proprietary dried green algae powder (Zivolife). The facility has passed food safety and cGMP audits and is compliant with the FDA Foreign Supplier Verification Program for importing food products into the United States.
• Distribution Partner: ZWorldwide, Inc. (Miami, Florida) - Holds exclusive worldwide rights to sell the Zivolife product as a food or food additive for human use, primarily targeting the North American green powder food market. ZWorldwide, Inc. functions as a direct-to-consumer marketing and distribution company.

Facility Network:

• Manufacturing: Alimenta Algae SAC's production site in Peru. Plans are to complete build-out to reach full capacity of roughly 100,000 kg per year by 2027.
• Research & Development: The company leases a laboratory and office space (approximately 2,700 square feet) at 608 Danley Drive, Unit #1, Fort Myers, FL 33907.
• Distribution: ZWorldwide, Inc. utilizes its online platform at www.zivo.life for direct-to-consumer sales.

Operational Metrics: The Alimenta Algae SAC facility successfully demonstrated continuous production of high-quality dried algae by early 2023. Production volumes remain relatively low but are anticipated to be constrained as the scale-up process continues. The facility is planned to reach a full capacity of approximately 100,000 kg per year by 2027. ZWorldwide, Inc. has committed to purchasing the entire ZIVOLife, LLC production through 2024 and at least 24,000 kg per year for a minimum of five years.

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: ZIVO BIOSCIENCE, INC. does not currently have internal sales, marketing, and distribution capabilities for its products.
• Channel Partners: ZWorldwide, Inc. serves as the exclusive worldwide distributor for the Zivolife product as a food or food additive for human use.
• Digital Platforms: ZWorldwide, Inc. actively retails the Zivolife product directly to consumers through its online platform at www.zivo.life.

Customer Portfolio: Enterprise Customers:

• Customer Concentration: ZIVO BIOSCIENCE, INC. has one customer, ZWorldwide, Inc., which accounted for 100% of its revenue for the year ended December 31, 2024. ZWorldwide, Inc. has committed to purchasing the entire supply of Zivolife produced in the first 18 months of the agreement and at least 2,000 kilograms per month through August 31, 2028.

Geographic Revenue Distribution:

• North America: The primary market focus for the introduction of the Zivolife product is the North American green powder food market.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The animal health industry is highly competitive, subject to rapid innovation and change. The global poultry industry's coccidiosis control market, valued at approximately $1.1 billion in 2024, has seen limited advancements in the past 60 years, relying predominantly on antibiotic- or ionophore-based products. Consumer and regulatory pressures are driving demand for non-antibiotic alternatives. The global vegan protein powder market, estimated at $4.6 billion in 2023, is experiencing significant growth driven by increasing shifts toward plant-based diets and consumer demand for healthful, nutritional ingredients.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• Poultry Gut Health and Avian Influenza: HuvePharma, Elanco, Zoetis, Phibro (producers of ionophores, anticoccidial compounds, and vaccines).
• Bovine Mastitis: Branded antibiotic solutions (ToDay™, Masti-Clear), homeopathic solutions (Amoxi-Mast™), topical/salve solutions (Germicidal teat dips, Fight Bac™ teat disinfectant spray, Sterosol™ Pre/Post Teat Dip), and vaccine/antimicrobial solutions (Lysigin, Spectramast LC™).
• Canine Joint Health: Boehringer Ingelheim, Zoetis, Inc., Merck Animal Health, Elanco, Bayer AG, Vetoquinol S.A., Ceva Sante Animale, Virbac Group, Norbrook Laboratories Ltd, Dechra Pharmaceuticals (key players in the global veterinary pain management drugs market).
• Human Immune Modulation (TLR4 inhibitors): Eritoran (Eisai Research Institute of Boston), Resatorvid (Takeda Pharmaceutical Company).
• Human Food and Food Ingredient (Algae powder): Earthrise, Cyanotech, AG1 (established microalgae and green powder food/nutraceutical businesses).
• Food Innovators/Ingredients: DSM, Cognis, ConAgra, Cargill, Nestle (innovators in food technology with extensive R&D budgets).
• Skin Health & Anti-Aging: Well Roots Biotin Rich Plus Collagen, Heliocare Skin Care Dietary Supplement, CoQ10 Supplement, Vitamin C, Peptan®, Verisol®, Pure Gold Collagen® (multitude of topical treatments and dietary supplements).

Emerging Competitive Threats: The industries are subject to rapid and significant innovation and change, including new entrants, disruptive technologies, and alternative solutions.

Competitive Response Strategy: ZIVO BIOSCIENCE, INC. aims to maintain its competitive advantage through its innovative non-antibiotic method of action for animal health, focusing on immune modulation, and by developing a cost-effective, commercial-scale growing technology for its nutritional algae product. The company also seeks strategic partnerships for development, regulatory compliance, and commercialization.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics:

• Global Economic and Social Instability: Adverse effects on revenue, financial condition, or results of operations due to credit market health, global wars/military conflicts, terrorism, geopolitical events, supply chain disruptions, tariff/trade policies, labor shortages, and persistent inflation.
• Political Instability in Peru: Exposure to risks from political instability, government regulations relating to agriculture and foreign investment, and policies of other nations, which could adversely affect the contract manufacturer and the company's business.
• Market Acceptance of Products: No assurance regarding successful distribution and market acceptance of products containing the company's algae, which could harm the ability to find or maintain new licensees. Technology Disruption: The industries are subject to rapid and significant innovation and change, posing a risk to the company's competitive position. Customer Concentration: Reliance on a single distributor (ZWorldwide, Inc.) for the Zivolife product, where loss or significant reduction in business would materially adversely impact operating results and cash flows.

Operational & Execution Risks

Supply Chain Vulnerabilities:

• Single Grower Dependency: Reliance on Alimenta Algae SAC as the sole facility for growing ZIVO BIOSCIENCE, INC.'s algae, making the company vulnerable to any termination or significant reduction in business from this grower.
• Agricultural Risks: Production of algae involves complex agricultural systems subject to unpredictable risks such as weather, disease, contamination, and water availability, which can interrupt production and lead to loss of harvestable output. Capacity Constraints: Challenges in proportionally advancing both manufacturing capacity (from Alimenta Algae SAC) and distribution networks (from ZWorldwide, Inc.) could adversely affect operating results and growth plans if either partner fails to meet contractual objectives. R&D Reliance on Third Parties: Reliance on third parties for growing proprietary algae strains and conducting research, preclinical, and clinical testing, which reduces control and could lead to delays or suspension of development activities if these third parties do not perform satisfactorily or terminate engagements.

Financial & Regulatory Risks

Market & Financial Risks:

• History of Operating Losses and Going Concern Uncertainty: Incurred net losses since inception, with a net loss of $13.4 million in 2024 and an accumulated deficit of $137.0 million. Expects continued operating losses and negative cash flows, raising substantial doubt about its ability to continue as a going concern without substantial additional financing.
• Need for Substantial Additional Financing: Requires significant capital for research, development, and potential commercialization efforts, with failure to obtain necessary capital forcing delays, reductions, or termination of product development.
• Stock Price Volatility: Market price and trading volume of securities are likely to be volatile due to trial results, regulatory actions, financial performance, financing efforts, and general market conditions. Regulatory & Compliance Risks:
• Lengthy and Expensive Development Process: Development of products involves a lengthy and expensive process with uncertain outcomes, potentially leading to delays or inability to complete commercialization.
• Increased Regulatory Scrutiny of Nutritional Supplements: Potential for new regulations to impose additional restrictions, increase costs, or lead to fines/enforcement actions if advertising or products do not comply.
• NDI Application Requirements: Selling dietary supplements requires a New Dietary Ingredient (NDI) Notification, which may necessitate human studies not yet conducted.
• Companion Animal Product Approvals: Requires specie-specific safety and health data and GRAS affirmation for each application (e.g., joint health for adult dogs).
• Potential cGMP for Skin Care: Contemplated legislation could require cGMP compliance for skin care and cosmetics production, increasing costs.

Geopolitical & External Risks

Geopolitical Exposure: The company's contract manufacturer is located in Peru, exposing operations to political instability and changes in government policies, laws, and regulations in that country. Trade Relations: (Not explicitly detailed beyond general mention in risk factors). Sanctions & Export Controls: (Not explicitly detailed beyond general mention in risk factors).

Innovation & Technology Leadership

Research & Development Focus: ZIVO BIOSCIENCE, INC.'s R&D is focused on two main areas:

• Therapeutic (Biotech): Identifying bioactive extracts, fractions, and molecules from its proprietary algal culture to treat human and animal diseases. Current focus areas include poultry coccidiosis (lead product candidate), avian influenza (proof of concept), bovine mastitis, canine joint health, and human immune modulation.
• Nutrition (Agtech): Developing a cost-effective, commercial-scale growing technology for its proprietary algal culture to be used as a nutritional product for human consumption, companion animal food ingredients, and skin health applications.

Core Technology Areas: The company's core technology revolves around its proprietary algal and bacterial strains, biologically active molecules and complexes derived therefrom, and specialized production and cultivation techniques. These technologies are leveraged for their inflammation-modulating and immune-boosting properties.

Innovation Pipeline:

• Poultry Gut Health (Coccidiosis): Actively developing a product candidate. Has conducted 23 clinical trials, with recent studies focused on optimizing and validating a single lead product candidate. Achieved statistically significant reduction in intestinal damage and improvement in Feed Conversion Ratio (FCR) comparable to market-leading ionophores.
• Avian Influenza: Completed an initial proof of concept study in December 2024, showing a reduction in viral titers and a delay in transmission of low pathogenicity avian influenza (LPAI). Further research and product development are justified.
• Bovine Mastitis: Discovery stage, pre-GMP, pre-GLP. Conducted multiple in vitro and ex vivo experiments, as well as four clinical trials. Next steps involve small studies to validate a product candidate.
• Canine Joint Health: Discovery stage, pre-GMP, pre-GLP. Conducted multiple in vitro inflammatory experiments, two in vivo trials with mice, and two ex vivo experiments using canine hip joint tissue. Additional ex vivo and in vivo studies are planned.
• Human Immune Modulation: Discovery stage. Conducted six in vitro experiments using human immune cells. Additional in vitro testing is planned.
• Algal Biomass for Human Consumption: Completed self-affirmed GRAS process in November 2018, updated in May 2023. Commercial sales began in June 2023.
• Biomass for Supporting Skin Health / Anti-aging: Planning several investigations to establish definitive support for the mechanism of action, with topical skin product testing started in 2020.
• NDI (New Dietary Ingredient): Requires human studies to support health benefits or claims for dietary supplement applications.

Intellectual Property Portfolio: ZIVO BIOSCIENCE, INC. has an extensive intellectual property portfolio.

• Patent Strategy: Relies on a combination of granted patents and patent applications globally. As of December 31, 2024, it holds numerous granted U.S. patents (e.g., Composition and Use of Phyto-percolate for Treatment of Disease, Agents and Mechanisms for Treating Hypercholesterolemia, Methods of Modulating Immune and Inflammatory Responses Via Administration of an Algal Biomass) and international patents (e.g., European Patent 3258948 for Algal Feed Ingredient for Controlling Coccidiosis and Necrotic Enteritis in Poultry). It also has a significant number of patent applications under prosecution in various countries (e.g., US, Brazil, Canada, Hong Kong, Mexico, Peru, Thailand, Australia, New Zealand, Japan, Russia, China, Europe, South Africa) covering areas like gut health, coccidiosis, necrotic enteritis, disease prevention, immune priming, and nutritional support.
• Licensing Programs: The company's business model includes creating value through licensing and/or other commercial arrangements with strategic partners.
• IP Litigation: No material disputes were disclosed.
• Trade Secrets: Relies on trade secrets, technical know-how, and continuing innovation, protected by non-disclosure and assignment of invention agreements with employees, consultants, and partners.

Technology Partnerships:

• Strategic Alliances: Long-term collaboration with Grupo Alimenta for commercial-scale algae cultivation and production.

Leadership & Governance

Executive Leadership Team

Leadership Continuity: The company is highly dependent on its executive team, including the Chief Executive Officer and Chief Financial Officer. Recruiting and retaining other qualified employees, consultants, and advisors, particularly scientific and technical personnel, is critical to success.

Board Composition: The Board of Directors includes John B. Payne, Keith R. Marchiando, Christopher D. Maggiore, Nola E. Masterson, Alison A. Cornell, and Laith Yaldoo. The principal of HEP Investments, LLC, a significant shareholder, was added to the board in July 2024. Specific details on independence, expertise areas, or committee structure were not provided in the filing.

Human Capital Strategy

Workforce Composition:

• Total Employees: 7 full-time employees as of December 31, 2024.
• Geographic Distribution: Not specified beyond general office locations.
• Skill Mix: Employees cover clinical development, product development, regulatory, manufacturing, quality, finance, and administration. The company also regularly uses independent contractors across the organization.

Talent Management: Acquisition & Retention: Recruiting and retaining qualified employees, consultants, and advisors, including scientific and technical personnel, is critical to the company's success. The company faces competition for talent from numerous pharmaceutical and biotechnology companies, as well as universities and research institutions. Employee Value Proposition: The company compensates executives, employees, directors, and service providers with equity as a component of compensation, issued under established plans like the 2021 Equity Incentive Plan and the 2024 Equity Incentive Plan for Non-Employee Directors.

Diversity & Development: Not explicitly detailed in the filing.

Regulatory Environment & Compliance

Regulatory Framework: Industry-Specific Regulations:

• Human Food and Food Ingredients: Regulated by the FDA and USDA. The company has completed the FDA’s self-affirmed Generally Regarded as Safe (GRAS) process for its dried algal biomass, allowing commercialization with a consumption limit of up to five grams per day. The GRAS dossier was updated in May 2023 to reflect current production methods and FDA standards.
• Foreign Supplier Verification Program (FSVP) and cGMP: To sell food products in the United States, food must comply with FDA 21 CFR 117 (Current Good Manufacturing Practice, Hazard Analysis, and Risk-Based Preventative Controls for Human Food). The company's contract manufacturer, Alimenta Algae SAC in Peru, has passed food safety and cGMP audits by Peruvian authorities and an FDA-certified third party, meeting FDA-FSVP requirements for U.S. import. An independent consultant serves as the FSVP importer of record.
• Dietary Supplements (DSHEA & NDI): Dietary supplements fall under FDA jurisdiction and must comply with the Dietary Supplement Health Education Act and the Food Safety Modernization Act. Selling as a dietary supplement requires a New Dietary Ingredient (NDI) Notification, which typically necessitates at least one human study to support safety and claims.
• Skin Care and Topical Uses: The U.S. Congress is contemplating legislation requiring cGMP for all skin care and cosmetics production.
• Poultry Applications: The U.S. Department of Agriculture’s Center for Veterinary Biologics (CVB) has claimed jurisdiction for reviewing the company's immune-modulating biologic for treating coccidiosis in broiler chickens, de-risking the regulatory path.
• Companion Animal Feed Ingredients & Supplements: Regulated by state and AAFCO officials, with national-level supervision by the FDA and CVM. Requires specie-specific safety and health data (e.g., a single safety/tox study and a separate dose/benefit study per animal application) and GRAS affirmation.

Trade & Export Controls: Not explicitly detailed beyond general mention in risk factors.

Legal Proceedings: The company may be subject to various claims, complaints, and legal actions in the normal course of business. As of the filing date, management believes there are no legal matters that would have a material adverse effect on its financial condition, results of operation, or cash flows.

Tax Strategy & Considerations

Tax Profile:

• Effective Tax Rate: 0.0% for both 2024 and 2023.
• Geographic Tax Planning: Not explicitly detailed.
• Tax Reform Impact: The 2017 Tax Act amended Section 174 of the Internal Revenue Code, requiring capitalization of research and experimental (R&E) expenditures for Federal tax purposes. R&E expenditures are a significant portion of the company's total expenditures.
• Deferred Tax Assets: As of December 31, 2024, the company had $13,732,734 in total deferred tax assets, primarily from Federal net operating loss carryforwards ($10,134,910) and stock-based compensation ($2,108,922).
• Valuation Allowance: A full valuation allowance of $13,732,558 has been established against deferred tax assets due to the company's history of losses and the assessment that realization is not "more likely than not." The valuation allowance increased by $1.35 million in 2024 and $1.58 million in 2023.
• Net Operating Loss (NOL) Carryforwards: Federal NOLs incurred after December 31, 2017, totaling $48,261,480, are carried forward indefinitely for Federal tax purposes. State NOLs total $3,018,662.
• Uncertain Tax Positions: As of December 31, 2024, the company has no uncertain tax positions.
• Tax Examinations: No tax examinations are currently in progress. The statute of limitations for tax years ended after December 31, 2020, are open for federal and state tax purposes.

Insurance & Risk Transfer

Risk Management Framework: ZIVO BIOSCIENCE, INC. relies on standard operating systems and software from established third parties (e.g., Microsoft 365, QuickBooks, Paylocity) for cybersecurity and to manage its computer systems, devices, and networks. The company outsources most aspects of its information technology management, believing this to be the most prudent and cost-effective course given its current size and relatively low cyber-risk profile. The board stays informed on data privacy and information security issues.

Insurance Coverage: The company finances a portion of its directors' and officers', and employment practices liability insurance premiums through short-term unsecured loan agreements.