HYDRO-FLO PRODUCTS, INC.

are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option grants are immediately vested, and the total stock-based compensation charge is recorded in the period of the measurement date. Warrant Accounting The Company accounts for warrants to purchase shares of common stock using the estimated fair value on the date of issuance as calculated using the Black-Scholes valuation model. Fair Value of Financial Instruments Fair value of financial instruments requires disclosure of the fair value information, whether or not recognized on the balance sheet, where it is practicable to estimate that value. As of June 30, 2025, the amounts reported for cash, accounts payable and other payable

rating expenses were $5,816,192 compared to $5,001,300, for the year ended June 30, 2024. Operating expenses consist primarily of research and development expenses and general and administrative expenses incurred in connection with the operation of our business. The increase of $814,892 in operating expenses was primarily due to an increase in salary expenses and an increase in research and development costs offset by a decrease in professional fees. 18 Other Income/(Expenses) Other income and (expenses) for the year ended June 30, 2025, were $(2,410,115) compared to $(4,879,903) for the year ended June 30, 2024. The net increase of $2,469,788 in other income and (expenses) was the result of a decrease in dividend expense of $37,506, a decrease in unrealized loss on related party equity in