OS Therapies Inc

Previous wording

The fair value of the redemption liability is calculated under Level 3 of the fair value hierarchy and is determined based upon a Probability-Weighted of Expected Returns Model (“PWERM”). This PWERM was determined to be the most appropriate method of estimating the value of possible redemption or conversion outcomes over time, since we have not entered into a priced equity round through March 31, 2024. The fair value of the redemption liability is calculated using the initial value of the Convertible Notes less the debt discount rate of 12.5% in Group A, 20% in Groups B and C, and 50% in Groups D, E and F. The redemption liability is then amortized over the remaining life of the note, utilizing the interest rates of 10% and 6% for the groups, respectively. The life of each note in Group A is for a set period of three years and is variable in Groups B, C, D, E and F, with a range of 12 months to three years. We retain the option to negotiate an extended maturity date for Groups B, C, D, E and F. The new embedded redemption values were $475,000 and $1,541,250 for the periods ended March 31, 2024 and December 31, 2023, respectively.

Current wording

The fair value of the redemption liability is calculated under Level 3 of the fair value hierarchy and is determined based upon a Probability-Weighted of Expected Returns Model (“PWERM”). This PWERM was determined to be the most appropriate method of estimating the value of possible redemption or conversion outcomes over time, since we have not entered into a priced equity round through June 30, 2024. The fair value of the redemption liability is calculated using the initial value of the Convertible Notes less the debt discount rate of 12.5% in Group A, 20% in Groups B and C, and 50% in Groups D, E and F. The redemption liability is then amortized over the remaining life of the note, utilizing the interest rates of 10% and 6% for the groups, respectively. The life of each note in Group A is for a set period of three years and is variable in Groups B, C, D, E and F, with a range of 12 months to three years. We retain the option to negotiate an extended maturity date for Groups B, C, D, E and F. The new embedded redemption values were $750,500 and $1,541,250 for the periods ended June 30, 2024 and December 31, 2023, respectively.

Previous wording

***Revenue.***We did not recognize revenues for the three months ended March 31, 2024 or the years ended December 31, 2023 and 2022.

Current wording

***Revenue.***We did not recognize revenues for the six months ended June 30, 2024 or the year ended December 31, 2023.

Previous wording

***Cumulative Series A Preferred Stock Dividend.***The Series A preferred stock dividend requirement represents the coupon dividends on our preferred stock and is identified as a separate component of our statement of operations to compute net income (loss) available to common shareholders. The coupon dividends are computed at 5% of the principal per annum and are recorded monthly. The cumulative accrued dividend at March 31, 2024 and 2023 was $375,000 and $250,000, respectively.

Current wording

***Cumulative Series A Preferred Stock Dividend.***The Series A preferred stock dividend requirement represents the coupon dividends on our preferred stock and is identified as a separate component of our statement of operations to compute net income (loss) available to common shareholders. The coupon dividends are computed at 5% of the principal per annum and are recorded monthly. The cumulative accrued dividend at June 30, 2024 and 2023 was $375,000 and $250,000, respectively. The Series A preferred stock was converted into common stock on a 1:1 basis in February 2024, and the last coupon dividend was issued in the quarter ended March 31, 2024.

Previous wording

Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023

Current wording

Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023

Previous wording

The following table summarizes our results of operations for the three months ended March 31, 2024 and 2023:

Current wording

The following table summarizes our results of operations for the six months ended June 30, 2024 and 2023:

Previous wording

***Research and Development Expenses.***Research and development expenses were approximately $0.4 million for the three months ended March 31, 2024 compared to approximately $0.8 million for the three months ended March 31, 2023. This decrease was primarily due to a decrease in vendor expenses associated with our Phase IIb clinical trial and a decrease in vendor expenses associated with out OST-tADC platform technology. The following table summarizes our research and development expenses for the three months ended March 31, 2024 and 2023:

Current wording

***Research and Development Expenses.***Research and development expenses were approximately $0.8 million for the six months ended June 30, 2024 compared to approximately $1.7 million for the six months ended June 30, 2023. This decrease was primarily due to a decrease in vendor expenses associated with our Phase IIb clinical trial and a decrease in vendor expenses associated with out OST-tADC platform technology. The following table summarizes our research and development expenses for the three months ended June 30, 2024 and 2023:

Previous wording

For the three months ended March 31, 2024 and 2023, the direct research and development expenses related to OST-HER2 were primarily lab fees, vendor expenses and staff payroll fees. In 2024, such expenses were primarily lab fees and related clinical support of approximately $0.3 million attributed to our Phase IIb clinical trial preparation and CRO costs as we completed IND-enabling studies. OST-tADC related direct research and development expenses were approximately $0.0 million and $0.2 million for the three months ended March 31, 2024 and 2023, respectively.

Current wording

For the six months ended June 30, 2024 and 2023, the direct research and development expenses related to OST-HER2 were primarily lab fees, vendor expenses and staff payroll fees. In 2024, such expenses were primarily lab fees and related clinical support of approximately $0.5 million attributed to our Phase IIb clinical trial preparation and CRO costs as we completed IND-enabling studies. OST-tADC related direct research and development expenses were approximately $0.0 million and $0.2 million for the six months ended June 30, 2024 and 2023, respectively.

Previous wording

***General and Administrative Expenses.***General and administrative expenses for the three months ended March 31, 2024 were approximately $0.3 million compared to $0.3 million for the three months ended March 31, 2023. These expenses were primarily attributed to marketing costs and accounting fees to consultants.

Current wording

***General and Administrative Expenses.***General and administrative expenses for the six months ended June 30, 2024 were approximately $0.7 million compared to $0.8 million for the six months ended June 30, 2023. These expenses were primarily attributed to marketing costs and accounting fees to consultants.

Previous wording

***Licensing Costs.***We did not have any licensing costs for the three months ended March 31, 2024 and 2023.

Current wording

***Licensing Costs.***We did not have any licensing costs for the six months ended June 30, 2024 and 2023.

Previous wording

***Interest Expense.***Interest expense for the three months ended March 31, 2024 was approximately $0.8 million compared to $0.8 million for the three months ended March 31, 2023. to the amounts of interest are comprised of accretion of debt discount being amortized in 2024 and 2023 from associated discounts related to convertible notes and placement agent warrants, together with interest expenses from the issuances of convertible notes.

Current wording

***Interest Expense.***Interest expense for the six months ended June 30, 2024 was approximately $1.6 million compared to $1.8 million for the six months ended June 30, 2023. to the amounts of interest are comprised of accretion of debt discount being amortized in 2024 and 2023 from associated discounts related to convertible notes and placement agent warrants, together with interest expenses from the issuances of convertible notes.

Previous wording

Since our inception, we have incurred significant operating losses. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of our product candidates. For the three months ended March 31, 2024 and 2023, we reported a net loss of approximately $1.5 million and $1.8 million, respectively, and had an accumulated deficit of approximately $31.0 million and $23.5 million, respectively. We expect to incur significant expenses at an increasing rate and increasing operating losses for the foreseeable future.

Current wording

Since our inception, we have incurred significant operating losses. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of our product candidates. For the six months ended June 30, 2024 and 2023, we reported a net loss of approximately $3.0 million and $4.4 million, respectively, and had an accumulated deficit of approximately $32.6 million and $23.5 million, respectively. We expect to incur significant expenses at an increasing rate and increasing operating losses for the foreseeable future.

Previous wording

As of March 31, 2024 and 2023, we had cash of approximately $0.1 million and $0.4 million, respectively. We have funded our operations to date primarily from the sale of our convertible notes in our private placements, which have provided total gross proceeds of $17.9 million as of March 31, 2024. We believe that the net proceeds from our private placements, together with our existing cash, will enable us to fund our operating expenses and capital expenditure requirements for the next three to six months.

Current wording

As of June 30, 2024 and 2023, we had cash of approximately $0.1 million and $0.0 million, respectively. We have funded our operations to date primarily from the sale of our convertible notes in our private placements, which have provided total gross proceeds of $19.2 million as of June 30, 2024. We believe that the net proceeds from our private placements, together with our existing cash, will enable us to fund our operating expenses and capital expenditure requirements for the next three to six months.

Previous wording

During the three months ended March 31, 2024 and 2023, operating activities used approximately $0.6 million and $0.4 million of cash, respectively, resulting from our net loss of approximately $1.5 million and $1.8 million, respectively, offset by net non-cash charges of approximately $0.6 million and $0.7 million, respectively, partially offset by net cash provided by changes in our operating assets and liabilities of approximately $0.2 million and $0.7 million, respectively.

Current wording

During the six months ended June 30, 2024 and 2023, operating activities used approximately $1.5 million and $1.3 million of cash, respectively, resulting from our net loss of approximately $3.0 million and $4.4 million, respectively, offset by net non-cash charges of approximately $1.1 million and $1.6 million, respectively, partially offset by net cash provided by changes in our operating assets and liabilities of approximately $0.4 million and $1.5 million, respectively.

Previous wording

Net cash provided by changes in our operating assets and liabilities for the three months ended March 31, 2024 and 2023 consisted primarily of an increase in accounts payable of approximately $0.04 million and $0.4 million, respectively, an increase in accrued interest of approximately $0.3 million and $0.2 million, respectively, and a change in accrued payroll of approximately $(0.1) million and $0.0 million, respectively.

Current wording

Net cash provided by changes in our operating assets and liabilities for the six months ended June 30, 2024 and 2023 consisted primarily of an increase in accounts payable of approximately $0.0 million and $1.3 million, respectively, an increase in accrued interest of approximately $0.5 million and $0.3 million, respectively, and a change in accrued payroll of approximately $(0.0) million and $(0.1) million, respectively.

Previous wording

Non-cash charges for the three months ended March 31, 2024 and 2023 were primarily the result of the amortization of debt discount on our convertible debt of approximately $0.6 million and $0.6 million, respectively. Changes in accounts payable, accrued expenses and other current liabilities and prepaid expenses and other current assets in all periods were generally due to growth in our business, the advancement of our research programs and the timing of vendor invoicing and payments.

Current wording

Non-cash charges for the six months ended June 30, 2024 and 2023 were primarily the result of the amortization of debt discount on our convertible debt of approximately $1.1 million and $1.5 million, respectively. Changes in accounts payable, accrued expenses and other current liabilities and prepaid expenses and other current assets in all periods were generally due to growth in our business, the advancement of our research programs and the timing of vendor invoicing and payments.

Previous wording

During the three months ended March 31, 2024 and 2023, net cash provided by investing activities was approximately $0.0 million and $0.0 million, respectively.

Current wording

During the six months ended June 30, 2024 and 2023, net cash provided by investing activities was approximately $0.0 million and $0.0 million, respectively.

Previous wording

During the three months ended March 31, 2024 and 2023, net cash provided by financing activities was approximately $0.7 million and $0.6 million, respectively. The net cash provided by financing activities for the three months ended March 31, 2024 and 2023 consisted primarily of net proceeds from sales of convertible notes, reduced by capitalized deferred offering costs.

Current wording

During the six months ended June 30, 2024 and 2023, net cash provided by financing activities was approximately $1.6 million and $1.1 million, respectively. The net cash provided by financing activities for the six months ended June 30, 2024 and 2023 consisted primarily of net proceeds from sales of convertible notes, reduced by capitalized deferred offering costs.

Previous wording

The total accrued interest on the convertible notes listed in the table above was approximately $2.3 million and $2.0 million as of March 31, 2024 and December 31, 2023, respectively. The carrying amount and face amount of such convertible notes differ because of the unamortized debt issuance costs and the debt discount (which are amortized over the original term of the instrument) — see accounting policy discussion below. The material terms of each group of Convertible Notes are described below.

Current wording

The total accrued interest on the convertible notes listed in the table above was approximately $2.5 million and $2.0 million as of June 30, 2024 and December 31, 2023, respectively. The carrying amount and face amount of such convertible notes differ because of the unamortized debt issuance costs and the debt discount (which are amortized over the original term of the instrument) — see accounting policy discussion below. The material terms of each group of Convertible Notes are described below.

Previous wording

***Group A Convertible Notes.***From July 2018 through November 2021, we issued convertible notes in an aggregate principal amount of $1,154,000 (the “Group A Convertible Notes”) to accredited investors, including related parties. Interest on the unpaid principal balance on the Group A Convertible Notes accrues at a rate of 10% per annum, computed on the basis of the actual number of days elapsed and a year of 365 days. Unless earlier converted into shares of Equity Securities, the principal and accrued interest on the Group A Convertible Notes are due and payable by us on demand by the holders of such convertible notes at any time after the earlier of (i) the Maturity Date and (ii) the closing of the Next Equity Financing (which is our anticipated initial public offering). In general, the stated Maturity Date varies from the date of issuance of two to four years and was extended in October 2023, under the same terms, until October 31, 2024.

Current wording

***Group A Convertible Notes.***From July 2018 through November 2021, we issued convertible notes in an aggregate principal amount of $1,154,000 (the “Group A Convertible Notes”) to accredited investors, including related parties. Interest on the unpaid principal balance on the Group A Convertible Notes accrued at a rate of 10% per annum, computed on the basis of the actual number of days elapsed and a year of 365 days. Unless earlier converted into shares of Equity Securities, the principal and accrued interest on the Group A Convertible Notes were due and payable by us on demand by the holders of such convertible notes at any time after the earlier of (i) the Maturity Date and (ii) the closing of the Next Equity Financing (which was our initial public offering). In general, the stated Maturity Date varied from the date of issuance of two to four years and was extended in October 2023, under the same terms, until October 31, 2024.

Previous wording

The Group A Convertible Notes will automatically convert into shares of our common stock upon the consummation of our anticipated initial public offering. The number of shares of our common stock that to be issued upon the automatic conversion will be equal to the quotient obtained by dividing the outstanding principal and unpaid accrued interest due on the Group A Convertible Note on the date of conversion by a percentage between 80% to 87.5%, as applicable, of the initial public offering price per share in such offering. The Group A Convertible Notes have conversion capitalization ceilings that range from $5 million to $25 million, which limits the price a noteholder must pay in a convertible note-to-common stock conversion occurrence. The Group A Convertible Notes will have a conversion price that ranges from $0.39 to $1.97 per share, depending on the applicable valuation ceiling of each note (based on an assumed initial public offering price of $4.00 per share).

Current wording

The Group A Convertible Notes automatically converted into shares of our common stock upon the consummation of our initial public offering. The number of shares of our common stock issued upon the automatic conversion was equal to the quotient obtained by dividing the outstanding principal and unpaid accrued interest due on the Group A Convertible Note on the date of conversion by a percentage between 80% to 87.5%, as applicable, of the initial public offering price per share in such offering. The Group A Convertible Notes had conversion capitalization ceilings that ranged from $5 million to $25 million, which limited the price a noteholder must pay in a convertible note-to-common stock conversion occurrence. The Group A Convertible Notes had a conversion price that ranged from $0.39 to $1.97 per share, depending on the applicable valuation ceiling of each note (based on the initial public offering price of $4.00 per share).

Previous wording

***Group B Convertible Notes.***From April 2020 through June 2021, we issued convertible notes in an aggregate principal amount of $5,154,000 (the “Group B Convertible Notes”) to accredited investors. Interest on the unpaid principal balance of the Group B Convertible Notes accrues at a rate of 6% per annum, computed on the basis of the actual number of days elapsed and a year of 365 days. Unless earlier converted into shares of Equity Securities, the principal and accrued interest are due and payable by us on demand by the convertible holders of such notes at any time after the earlier of (i) the Maturity Date and (ii) the closing of the Next Equity Financing (which is our anticipated initial public offering). In general, the stated Maturity Date was March 31, 2022 but was extended in October 2023, under the same terms, until October 31, 2024.

Current wording

***Group B Convertible Notes.***From April 2020 through June 2021, we issued convertible notes in an aggregate principal amount of $5,154,000 (the “Group B Convertible Notes”) to accredited investors. Interest on the unpaid principal balance of the Group B Convertible Notes accrued at a rate of 6% per annum, computed on the basis of the actual number of days elapsed and a year of 365 days. Unless earlier converted into shares of Equity Securities, the principal and accrued interest were due and payable by us on demand by the convertible holders of such notes at any time after the earlier of (i) the Maturity Date and (ii) the closing of the Next Equity Financing (which was our initial public offering). In general, the stated Maturity Date was March 31, 2022 but was extended in October 2023, under the same terms, until October 31, 2024.

Previous wording

The Group B Convertible Notes will automatically convert into shares of our common stock upon the consummation of our anticipated initial public offering. The number of shares of our common stock that to be issued upon the automatic conversion will be equal to the quotient obtained by dividing the outstanding principal and unpaid accrued interest due on the Group B Convertible Note on the date of conversion by 80% of the initial public offering price per share in such offering. The Group B Convertible Notes have a Conversion Capitalization ceiling of $19 million, which limits the price a noteholder must pay in a convertible note-to-common stock conversion occurrence. As a result of the valuation ceiling, the Group B Convertible Notes will have a conversion price of $1.31 per share (based on an assumed initial public offering price of $4.00 per share).

Current wording

The Group B Convertible Notes automatically converted into shares of our common stock upon the consummation of our initial public offering. The number of shares of our common stock issued upon the automatic conversion was equal to the quotient obtained by dividing the outstanding principal and unpaid accrued interest due on the Group B Convertible Note on the date of conversion by 80% of the initial public offering price per share in such offering. The Group B Convertible Notes had a conversion capitalization ceiling of $19 million, which limited the price a noteholder must pay in a convertible note-to-common stock conversion occurrence. As a result of the valuation ceiling, the Group B Convertible Notes had a conversion price of $1.31 per share (based on the initial public offering price of $4.00 per share).

Previous wording

***Group C Convertible Notes.***From June 2021 through January 2023, we issued convertible notes in an aggregate principal amount of $3,945,020 (the “Group C Convertible Notes”) to accredited investors. Interest on the unpaid principal balance of the Group C Convertible Notes accrues at a rate of 6% per annum, computed on the basis of the actual number of days elapsed and a year of 365 days. Unless earlier converted into shares of Equity Securities, the principal and accrued interest are due and payable by us on demand by the holders of such convertible notes at any time after the earlier of (i) the Maturity Date and (ii) the closing of the Next Equity Financing (which is our anticipated initial public offering). In general, the stated Maturity Date is May 31, 2024 but was extended in October 2023, under the same terms, until October 31, 2024.

Current wording

***Group C Convertible Notes.***From June 2021 through January 2023, we issued convertible notes in an aggregate principal amount of $3,945,020 (the “Group C Convertible Notes”) to accredited investors. Interest on the unpaid principal balance of the Group C Convertible Notes accrued at a rate of 6% per annum, computed on the basis of the actual number of days elapsed and a year of 365 days. Unless earlier converted into shares of Equity Securities, the principal and accrued interest were due and payable by us on demand by the holders of such convertible notes at any time after the earlier of (i) the Maturity Date and (ii) the closing of the Next Equity Financing (which was our initial public offering). In general, the stated Maturity Date was May 31, 2024 but was extended in October 2023, under the same terms, until October 31, 2024.

Previous wording

The Group C Convertible Notes will automatically convert into shares of our common stock upon the consummation of our anticipated initial public offering. The number of shares of our common stock that to be issued upon the automatic conversion will be equal to the quotient obtained by dividing the outstanding principal and unpaid accrued interest due on the Group C Convertible Note on the date of conversion of our anticipated initial public offering by 80% of the initial public offering price per share in such offering. The Group C Convertible Notes have a conversion capitalization ceiling of $50 million, except that one note is subject to a valuation ceiling of $19 million, which limits the price a noteholder must pay in a convertible note-to-common stock conversion occurrence. As a result of the applicable valuation ceiling, the Group C Convertible Notes will have a conversion price of $1.31 or $2.61 per share, as applicable (based on an assumed initial public offering price of $4.00 per share).

Current wording

The Group C Convertible Notes automatically converted into shares of our common stock upon the consummation of our initial public offering. The number of shares of our common stock issued upon the automatic conversion was equal to the quotient obtained by dividing the outstanding principal and unpaid accrued interest due on the Group C Convertible Note on the date of conversion by 80% of the initial public offering price per share in such offering. The Group C Convertible Notes had a conversion capitalization ceiling of $50 million, except that one note was subject to a valuation ceiling of $19 million, which limited the price a noteholder must pay in a convertible note-to-common stock conversion occurrence. As a result of the applicable valuation ceiling, the Group C Convertible Notes had a conversion price of $1.31 or $2.59 per share, as applicable (based on the initial public offering price of $4.00 per share).

Previous wording

***Bridge Notes (Groups D, E and F).***In November 2022, we issued convertible notes in an aggregate principal amount of $2,000,000 (the “Group D Convertible Notes”) to accredited investors. From February to June 2023, we issued convertible notes in an aggregate principal amount of $1,100,000 (the “Group E Convertible Notes”) to accredited investors. From June 2023 to April 2024, we issued convertible notes in an aggregate principal amount of $3,433,500 (the “Group F Convertible Notes” and, collectively with the Group D Convertible Notes and Group E Convertible Notes, the “Bridge Notes”) to accredited investors, of which an aggregate of $750,000 was issued in April 2024. Interest on the unpaid principal balance of the Bridge Notes accrues at a rate of 6% per annum, computed on the basis of the actual number of days elapsed and a year of 365 days. Unless earlier converted into shares of Equity Securities, the principal and accrued interest are due and payable by us on demand by the holders of such convertible notes at any time after the earlier of (i) the Maturity Date and (ii) the closing of the Next Equity Financing (which is our anticipated initial public offering). In general, the stated Maturity Date is October 31, 2024.

Current wording

***Bridge Notes (Groups D, E and F).***In November 2022, we issued convertible notes in an aggregate principal amount of $2,000,000 (the “Group D Convertible Notes”) to accredited investors. From February to June 2023, we issued convertible notes in an aggregate principal amount of $1,100,000 (the “Group E Convertible Notes”) to accredited investors. From June 2023 to April 2024, we issued convertible notes in an aggregate principal amount of $3,433,500 (the “Group F Convertible Notes” and, collectively with the Group D Convertible Notes and Group E Convertible Notes, the “Bridge Notes”) to accredited investors, of which an aggregate of $750,000 was issued in April 2024. Interest on the unpaid principal balance of the Bridge Notes accrued at a rate of 6% per annum, computed on the basis of the actual number of days elapsed and a year of 365 days. Unless earlier converted into shares of Equity Securities, the principal and accrued interest was due and payable by us on demand by the holders of such convertible notes at any time after the earlier of (i) the Maturity Date and (ii) the closing of the Next Equity Financing (which was our initial public offering). In general, the stated Maturity Date was October 31, 2024.

Previous wording

The Bridge Notes will automatically convert into shares of our common stock upon the consummation of our anticipated initial public offering. The number of shares of our common stock that to be issued upon the automatic conversion will be equal to the quotient obtained by dividing the outstanding principal and unpaid accrued interest due on a Bridge Note on the date of conversion of our anticipated initial public offering by 50% of the initial public offering price per share in such offering. The Bridge Notes have a conversion capitalization ceiling of $50 million, which limits the price a noteholder must pay in a convertible note-to-common stock conversion occurrence. As a result of the valuation ceiling, the Bridge Notes will have a conversion price of $2.00 per share (based on an assumed initial public offering price of $4.00 per share).

Current wording

The Bridge Notes automatically converted into shares of our common stock upon the consummation of our initial public offering. The number of shares of our common stock issued upon the automatic conversion was equal to the quotient obtained by dividing the outstanding principal and unpaid accrued interest due on a Bridge Note on the date of conversion by 50% of the initial public offering price per share in such offering. The Bridge Notes had a conversion capitalization ceiling of $50 million, which limited the price a noteholder must pay in a convertible note-to-common stock conversion occurrence. As a result of the valuation ceiling, the Bridge Notes had a conversion price of $2.00 per share (based on the initial public offering price of $4.00 per share).

Previous wording

Demand Note. On March 6, 2024, we issued a demand promissory note to a lender who was an investor in one of our prior convertible notes rounds in a principal amount of $100,000. The demand note bears interest at a rate of 8% per annum and the principal plus all accrued interest is payable upon demand by such lender. If such note is not paid on demand by us, interest will accrue at a rate of the lesser of 16% per annum and the highest rate of interest allowable under Maryland law. As of the date of May 13, 2024, the lender has not demanded payment from us.

Current wording

Demand Notes. On March 6, 2024 and June 28, 2024, we issued demand promissory notes to a lender who was an investor in one of our prior convertible notes rounds in a principal amount of $100,000 and $150,000, respectively. The demand notes bear interest at a rate of 8% per annum and the principal plus all accrued interest is payable upon demand by such lender. If such notes are not paid on demand by us, interest will accrue at a rate of the lesser of 16% per annum and the highest rate of interest allowable under Maryland law.

Previous wording

***BlinkBio.***On August 19, 2020, we issued a convertible note with a principal amount of $2,400,000 (the “BlinkBio Convertible Note”) to BlinkBio, Inc., which is a related party based on Dr. Goddard being our Chairman and as the Chairman and Chief Executive Officer of BlinkBio, in exchange for the entry into the license agreement. On March 15, 2021, the principal and unpaid accrued interest of $100,000 of the BlinkBio Convertible Note converted into 1,302,082 shares of our Series A preferred stock and then distributed to BlinkBio stockholders. The BlinkBio Convertible Note had a conversion capitalization ceiling of $19.2 million, which limited the price a noteholder must pay in a convertible note-to-common stock conversion occurrence. On February 9, 2024, the 1,302,082 shares of our Series A preferred stock were converted into 1,302,082 shares of common stock (on a pre-split basis).

Current wording

***BlinkBio.***On August 19, 2020, we issued a convertible note with a principal amount of $2,400,000 (the “BlinkBio Convertible Note”) to BlinkBio, Inc., which is a related party based on Dr. Goddard being our Chairman and as the Chairman and Chief Executive Officer of BlinkBio, in exchange for the entry into the license agreement. On March 15, 2021, the principal and unpaid accrued interest of $100,000 of the BlinkBio Convertible Note converted into 1,302,082 shares of our Series A preferred stock and then distributed to BlinkBio stockholders. The BlinkBio Convertible Note had a conversion capitalization ceiling of $19.2 million, which limited the price a noteholder must pay in a convertible note-to-common stock conversion occurrence. On February 9, 2024, the 1,302,082 shares of our Series A preferred stock were converted into 651,041 shares of common stock (on a post-split basis).

Previous wording

***George Clinical.***In June 2020, we entered into a services agreement, as amended, with George Clinical, Inc., a clinical contract research organization. Pursuant to this agreement, we engaged George Clinical to use its clinical research services for our study entitled “An Open Label, Phase 2 Study of Maintenance Therapy with OST-HER2 after Resection of Recurrent Osteosarcoma.” Under the terms of the agreement, we are required to pay to George Clinical certain fees described in the fee schedule below. The total budget under the agreement is approximately $2,436,928. For the three months ended March 31, 2024 and year ended December 31, 2023, we paid $86,687 and $921,300, respectively, to George Clinical. These payments have been recorded as research and development expenses in our Statement of Operations and Comprehensive Loss. The fee schedule for certain fees and corresponding payment amounts is set forth below.

Current wording

***George Clinical.***In June 2020, we entered into a services agreement, as amended, with George Clinical, Inc., a clinical contract research organization. Pursuant to this agreement, we engaged George Clinical to use its clinical research services for our study entitled “An Open Label, Phase 2 Study of Maintenance Therapy with OST-HER2 after Resection of Recurrent Osteosarcoma.” Under the terms of the agreement, we are required to pay to George Clinical certain fees described in the fee schedule below. The total new budget under the agreement is approximately $2,436,928. For the six months ended June 30, 2024 and year ended December 31, 2023, we paid $219,200 and $921,300, respectively, to George Clinical. These payments have been recorded as research and development expenses in our Statement of Operations and Comprehensive Loss. The fee schedule for certain fees and corresponding payment amounts is set forth below.

Previous wording

George Clinical tracks and invoices us for the number of task units completed and pass-through costs are invoiced each month in arrears based on actual costs without mark-up. The PTC Fee Advance will be used to offset the first few months of invoices payable. As of March 31, 2024, the balance due to George Clinical was $644,287.

Current wording

George Clinical tracks and invoices us for the number of task units completed and pass-through costs are invoiced each month in arrears based on actual costs without mark-up. The PTC Fee Advance will be used to offset the first few months of invoices payable. As of June 30, 2024, the balance due to George Clinical was $663,622.

Previous wording

We will remain an emerging growth company until the earliest of (i) the last day of our first fiscal year in which we have total annual gross revenues of $1.235 billion or more; (ii) the date on which we are deemed to be a “large accelerated filer” under the rules of the SEC with at least $700.0 million of outstanding equity securities held by non-affiliates; (iii) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the previous three years; or (iv) the last day of our fiscal year following the fifth anniversary of the date of the completion of our anticipated initial public offering.

Current wording

We will remain an emerging growth company until the earliest of (i) the last day of our first fiscal year in which we have total annual gross revenues of $1.235 billion or more; (ii) the date on which we are deemed to be a “large accelerated filer” under the rules of the SEC with at least $700.0 million of outstanding equity securities held by non-affiliates; (iii) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the previous three years; or (iv) the last day of our fiscal year following the fifth anniversary of the date of the completion of our initial public offering.