SOLESENCE, INC. (SLSN) Business

Business
Segment and Geographical Information

Our
operations comprise a single business segment and all of our long-lived assets are located within the United States. See Note
13 to the accompanying Financial Statements for additional information.

6

Key
Customers

A
limited number of key customers account for a substantial portion of our commercial revenue. We are seeing the composition of
these key customers change with the growth we are experiencing within our consumer products line, which has grown to exceed our
personal care ingredients line significantly.  For 2025, total consumer products revenue amounted to $54.9M or 88% of total
revenue compared to $44.4M, or 85% for 2024.  In particular, revenue from our three largest customers across all business
areas included two of our consumer products customers and our largest customer in personal care ingredients (BASF), constituted
approximately 29%, 16%, and 10%, respectively, of our 2025 total revenue.

As
our consumer products continue to represent more of our total revenue, we expect to see a number of smaller (sub-10% of revenue)
customers represent a more significant portion of our total revenue. We have experienced this in 2025 and 2024 and expect it to
continue in 2026 and beyond.

While
our agreements with BASF are long-term agreements, they may be terminated by BASF under certain circumstances with contractually
required notice and do not provide any guarantees that BASF will buy our products. The loss of one of our largest customers or
the failure to attract new customers could have a material adverse effect on our business, results of operations and financial
condition. To reduce the impact of having a high concentration of sales to a limited number of customers, we have pursued new
customers through our market focused business model, and particularly through our consumer products. To the extent we are successful
in adding a large number of customers through this model, and maintaining or expanding our existing partners, we believe we will
be able to best manage the risks associated with customer concentration.

Forward-Looking
Statements

We
want to provide investors with more meaningful and useful information. As a result, this Annual Report on Form 10-K (the “Form
10-K”) contains certain “forward-looking statements”, as defined in Section 27A of the Securities Act of 1933,
as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). These statements reflect our current expectations of the future results of our operations, performance and achievements.
Forward-looking statements are covered under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
We have tried, wherever possible, to identify these statements by using words such as “anticipates”, “believes”,
“estimates”, “expects”, “plans”, “intends” and similar expressions. These statements
reflect management’s current beliefs and are based on information now available to it. Accordingly, these statements are
subject to certain risks, uncertainties and contingencies that could cause our actual results, performance or achievements in
2026 and beyond to differ materially from those expressed in, or implied by, such statements. These risks, uncertainties and factors
include, without limitation: our ability to be consistently profitable despite the losses we have incurred since our incorporation;
a decision by a customer to cancel a purchase order or supply agreement in light of our dependence on a limited number of key
customers; our potential inability to obtain working capital when needed on acceptable terms or at all; our ability to obtain
materials at costs we can pass through to our customers, including high purity zinc, and other items impacted by supply chain
pressures, including tariffs; uncertain demand for, and acceptance of, our Solésence products, and our advanced materials;
our manufacturing capacity and product mix flexibility in light of customer demand; our limited marketing experience, including
with our suite of consumer products; changes in development and distribution relationships; the impact of competitive products
and technologies; our dependence on patents and protection of proprietary information; our ability to maintain an appropriate
electronic trading venue for our securities; the impact of any potential new governmental regulations, especially any new governmental
regulations focusing on the processing, handling, storage or sale of nanomaterials as it could impact our personal care ingredients
business, that could be difficult to respond to or costly to comply with; business interruptions
due to unexpected events or public health crises, including viral pandemics such as COVID-19; and the resolution of litigation
or other legal proceedings in which we may become involved. In addition, our forward-looking statements could be affected by general
industry and market conditions and growth rates. Readers of this Form 10-K should not place undue reliance on any forward-looking
statements. Except as required by federal securities laws, we undertake no obligation to update or revise these forward-looking
statements to reflect new events or uncertainties.

Investor
Information

We
are subject to the informational requirements of the Exchange Act and, accordingly, file periodic reports, proxy statements and
other information with the Securities and Exchange Commission (the “SEC”). Such reports, proxy statements and other
information may be obtained by visiting the Public Reference Room of the SEC at 100 F Street, N.E., Washington, DC 20549 or by
calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site (http://www.sec.gov) that contains reports,
proxy and information statements and other information regarding issuers that file electronically.

Financial
and other information may also be accessed at our website. The address is to ir.solesence.com. We make available, free
of charge, copies of our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments
to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after
filing such material electronically with, or otherwise furnishing it to, the SEC, and intend to make all such reports and amendments
to reports available free of charge on our website. We have included our website address throughout this Form 10-K as textual
references only. The information contained on, or accessible through, our website is not incorporated into this Form 10-K.