Cadrenal Therapeutics, Inc.

**CADRENAL THERAPEUTICS, INC.

Notes to Financial Statements

Note 1. Description of Business and Summary of Significant Accounting Policies

Cadrenal Therapeutics, Inc. (the “Company” or “Cadrenal”) was incorporated on January 25, 2022, in the State of Delaware and is headquartered in Ponte Vedra, Florida. Cadrenal Therapeutics, Inc. is a biopharmaceutical company that develops therapeutics for patients with certain cardiovascular conditions. The Company is developing its late-stage asset, tecarfarin, a new oral vitamin K antagonist (“VKA”) designed to be a better and safer anticoagulant than warfarin. Although warfarin is widely used off-label for several rare cardiovascular conditions, extensive clinical and real-world data have shown it to have significant serious side effects. With its innovation, Cadrenal aims to meet the unmet needs of this patient population by relieving them and their healthcare providers of some of warfarin’s most significant clinical challenges.

Cadrenal is pursuing a pipeline-in-a-product approach with tecarfarin. The Company received ODD and fast-track status for tecarfarin in end-stage kidney disease and atrial fibrillation (“ESKD+AFib”). Tecarfarin also received Orphan Drug designation (“ODD”) for advanced heart failure patients with implanted left ventricular assist devices (“LVADs”).

Basis of Presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for the fair presentation of the Company’s financial statements for the periods presented. The Company’s fiscal year-end is December 31.

The Company’s accompanying financial statements are unaudited. The unaudited interim financial statements have been prepared on the same basis as the audited annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of June 30, 2025, the results of its operations for the three and six months ended June 30, 2025 and 2024, the statements of changes in stockholders’ equity for the three and six months ended June 30, 2025 and 2024, and its cash flows for the six months ended June 30, 2025 and 2024. The financial data and other information disclosed in these notes related to the three and six months ended June 30, 2025, and 2024 are also unaudited. The results for the three and six months ended June 30, 2025, are not necessarily indicative of results to be expected for the year ending December 31, 2025, any other interim periods, or any future year or period. These interim financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2024, and notes thereto, which are included in the Company’s Annual Report on Form 10-K filed with the SEC on March 13, 2025.

Liquidity

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. The financial statements do not reflect any adjustments relating to the recoverability and reclassification of assets and liabilities that might be necessary if the Company is unable to continue as a going concern. Since its inception, the Company has incurred operating losses and negative cash flows from operations. For the six months ended June 30, 2025, the Company had a net loss of $7.5 million, which included $1.1 million of non-cash expenses. Cash used in operations totaled $7.7 million. As of June 30, 2025, the Company had cash and cash equivalents of $5.6 million, net working capital of $4.3 million, and an accumulated deficit of $33.2 million.

From July 1, 2025 through July 15, 2025, the Company sold 39,741 shares of its common stock through its at-the-market (ATM) facility with H.C. Wainwright & Co., LLC (“H.C.W.”), resulting in total gross proceeds of approximately $516,000 and net proceeds of approximately $499,000.

The Company’s cash and cash equivalents balance of approximately $5.0 million as of August 6, 2025 is expected to be sufficient to fund its operations for at least the next twelve months from the date of the filing of its Quarterly Report on Form 10-Q; however, the Company will require additional funding to conduct any further late-stage clinical trials, including a Phase 3 clinical trial for tecarfarin.

Management intends to raise additional funds through partnering, the sale of equity, and debt financing. However, there can be no assurance that the Company will be able to complete partnering transactions or financings on terms acceptable to the Company or at all. If the Company is unable to raise additional funding to meet its working capital needs in the future, it will be forced to delay or reduce the scope of its research programs and/or limit or cease its operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Emerging Growth Company Status

As an “emerging growth company” (“EGC”) under the Jumpstart Our Business Startups Act (“JOBS Act”), the Company may elect to take advantage of certain forms of relief from various reporting requirements that apply to public companies. The relief under the JOBS Act includes an extended transition period for implementing new or revised accounting standards. The Company has elected to take advantage of this extended transition period and, as a result, the Company’s financial statements may not be comparable to those of companies that implement accounting standards as of the effective dates for public companies. The Company may take advantage of the relief afforded under the JOBS Act up until the last day of the fiscal year following the fifth anniversary of an offering or such earlier time that it is no longer an EGC.

Use of Estimates

Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of expenses during the reporting period. Significant estimates and assumptions made in the accompanying financial statements include, but are not limited to, the fair value of stock-based awards, deferred tax assets and valuation allowance, income tax uncertainties, and certain accruals. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances change. Actual results could differ from those estimates.

Concentration of Credit and Other Risks and Uncertainties

Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist primarily of cash and cash equivalents. Cash is maintained at high-credit-quality financial institutions; at times, balances may exceed federally insured limits. All interest-bearing and non-interest-bearing cash balances are insured up to $250,000 at each financial institution. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows.

The Company is subject to several risks common for early-stage biopharmaceutical companies including, but not limited to, dependency on the clinical and commercial success of its product candidate, ability to obtain regulatory approval of its product candidate, the need for substantial additional financing to achieve its goals, uncertainty of broad adoption of its approved products, if any, by physicians and patients, significant competition and untested manufacturing capabilities.

Segment Reporting

Operating segments are defined as components of an entity where separate financial information is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance. The Company’s CODM is the Chief Executive Officer, who reviews financial information on a company-wide basis for purposes of allocating resources and assessing financial performance. The Company manages its business activities as a single entity and operates inone reportable segment.

The CODM assesses the performance of itsone reportable segment and decides how to allocate resources based on the loss from operations and net loss. The CODM utilizes loss from operations and net loss, as presented on the Company’s statements of operations and comprehensive loss, to evaluate the Company’s business plan, which includes clinical development roadmaps and long-range financial models as key inputs to decisions on resource allocation and its assessment of the performance of the business.

Significant expenses within loss from operations and net loss include research and development and general and administrative expenses, which are each separately presented on the Company’s statements of operations and comprehensive loss. Other segment items include depreciation expense and interest and dividend income as presented on the Company’s statements of operations and comprehensive loss. The accounting policies used to measure the segment’s profit and loss are the same as those described in the summary of significant accounting policies.

The measure of segment assets is reported on the balance sheets as total assets.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents. Cash and cash equivalents include cash and money market funds.

Stock-Based Compensation

The Company measures its stock-based awards granted to employees, consultants, and directors based on the estimated grant-date fair values of the awards and recognizes the compensation over the requisite service period using the straight-line method. The Company uses the Black-Scholes option-pricing model to estimate the fair value of its stock option awards. The Company accounts for forfeitures as they occur.

The Black-Scholes model requires the use of highly subjective and complex assumptions, which determine the fair value of stock-based payment awards, including the option’s expected term and the price volatility of the underlying stock. The Company estimates the fair value of options granted by using the Black-Scholes model with the following assumptions:

Expected Volatility—The Company estimated volatility for option grants by evaluating the historical volatility of a peer group of companies for the period immediately preceding the option grant for a term that is approximately equal to the options’ expected term.

Expected Term—The expected term of the Company’s options represents the period that the stock-based payment awards are expected to be outstanding. The expected term was estimated using the simplified method for employee stock options since the Company does not have adequate historical exercise data to estimate the expected term.

Deferred Offering Costs

The Company capitalizes certain legal, professional, and other third-party costs that are directly associated with in-process equity financings until such financings are consummated, at which time such costs are recorded against the gross proceeds of the offering. Should an in-process equity financing be abandoned, the deferred offering costs will be expensed immediately as a charge to operating expenses in the statements of operations and comprehensive loss.

Income Taxes

Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Management makes an assessment of the likelihood that the resulting deferred tax assets will be realized. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. Due to the Company’s historical operating performance and net losses, the net deferred tax assets have been fully offset by a valuation allowance.

The Company recognizes uncertain income tax positions at the largest amount, which is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Changes in recognition or measurement are reflected in the period in which judgment occurs. The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of the provision for income taxes.

Net Loss Per Common Share

Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of shares of common stock and pre-funded warrants outstanding for the period, without consideration for potential dilutive shares of common stock. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock and common stock equivalents of potentially dilutive securities outstanding for the period determined using the treasury stock or if-converted methods. Since the Company was in a loss position for all periods presented, basic net loss per common share is the same as diluted net loss per common share since the effects of potentially dilutive securities are anti-dilutive. Shares of common stock subject to repurchase are excluded from the weighted-average shares.

Comprehensive Loss

Comprehensive loss is defined as the change in equity during a period from transactions and other events or circumstances from non-owner sources. Net loss and comprehensive loss were the same for the periods presented in the accompanying financial statements.

Research and Development Expenses

Research and development costs are expensed as incurred and consist of fees paid to other entities that conduct certain research and development activities on the Company’s behalf. Acquired intangible assets are expensed as research and development costs if, at the time of payment, the technology is under development; is not approved by the United States Food and Drug Administration (“FDA”) or other regulatory agencies for marketing; has not reached technical feasibility; or otherwise has no foreseeable alternative future use. Non-refundable advance payments for goods or services to be received in the future for use in research and development activities are capitalized and then expensed as the related goods are delivered or the services are performed.

Patents

Patent costs are comprised primarily of external legal fees, filing fees incurred to file patent applications, and periodic renewal fees to keep the patent in force. They are expensed as incurred as a component of general and administrative expenses.

Note 2. Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures. The ASU requires greater disaggregation of information about a reporting entity’s effective tax rate reconciliation and information on income taxes paid. The ASU applies to all entities subject to income taxes and is intended to help investors better understand an entity’s exposure to potential changes in jurisdictional tax legislation and assess income tax information that affects cash flow forecasts and capital allocation decisions. The ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The adoption of this ASU on January 1, 2025, had no material impact on the Company’s financial statements.

Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03 Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40). The ASU aims to improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. In January 2025, the ASU was subsequently amended by ASU 2025-01 to clarify the effective date by which all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption of ASU 2024-03 is permitted. The Company is currently evaluating the impact of this guidance on its financial statements.

Note 3. Fair Value Measurements

Assets and liabilities recorded at fair value on a recurring basis in the balance sheet are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows:

Financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used in such measurements by major security type are presented in the following table:

The carrying amounts of cash and cash equivalents, prepaid expenses, deferred offering costs, accounts payable, and accrued liabilities approximate their fair values due to their short-term nature. There were no transfers of liabilities among the fair value measurement categories during any of the periods presented.

Note 4. Accrued Liabilities

Accrued liabilities consist of the following:

Note 5. Leases, Commitments, and Contingencies

Leases

In accordance with ASC 842, Leases, the Company determines if an arrangement is or contains a lease at inception. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

At lease inception, the Company determines whether an arrangement is an operating or capital lease. For operating leases, the Company recognizes rent expense, inclusive of rent escalation, on a straight-line basis over the lease term.

The Company classifies leases at the lease commencement date as operating or finance leases and records a right-of-use asset and a lease liability on the balance sheet for all leases with an initial lease term of greater than 12 months. Leases with an initial term of 12 months or less are not recorded in the balance sheet pursuant to the practical expedient available under ASC 842, but payments are recognized as expenses on a straight-line basis over the lease term.

Finance and operating right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term using the discount rate implicit in the lease. If the rate implicit is not readily determinable, the Company utilizes an estimate of its incremental borrowing rate based upon the available information at the lease commencement date. Operating lease assets are further adjusted for prepaid or accrued lease payments. Operating lease expense is recognized on a straight-line basis over the lease term.

In October 2024, the Company amended its lease for office space to extend the lease term for one additional year. The lease agreement (as amended) has a term that extends through October 31, 2025 with no option to renew. Operating lease expenses were $6,656 and $6,839 for the three months ended June 30, 2025 and 2024, respectively. Operating lease expenses were $13,313 and $13,394 for the six months ended June 30, 2025 and 2024, respectively. Cash paid for the office lease was $13,313 and $13,391 for the six months ended June 30, 2025 and 2024, respectively.

Future annual lease payments under non-cancellable operating leases as of June 30, 2025 were as follows:

Contingencies

In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown, because it involves claims that may be made against the Company in the future, but have not yet been made. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated.

Indemnification

In accordance with the Company’s certificate of incorporation and bylaws, the Company indemnifies its officers and directors for certain events or occurrences, subject to certain limits, while they are serving in such capacity. In addition, the Company has entered into indemnification agreements with its officers and directors. There have been no claims to date, and the Company has a directors and officers liability insurance policy that may enable it to recover a portion of any amounts paid for future claims.

Note 6. Stockholders’ Equity

Reverse Stock Split

On July 29, 2024, the Company’s stockholders approved an amendment to its Amended and Restated Certificate of Incorporation to effect a reverse stock split of its shares of common stock, and its Board of Directors subsequently approved a final reverse stock split ratio of 1-for-15. The reverse stock split became effective on August 20, 2024 (the “Effective Date”). On the Effective Date, every 15 shares of issued and outstanding common stock were combined and converted into one issued and outstanding share of common stock. The number of authorized shares of common stock was not reduced and the par value per share of common stock remained unchanged. Fractional shares were canceled, and stockholders received cash in lieu thereof. A proportionate adjustment was also made to the maximum number of shares of common stock issuable under the Cadrenal Therapeutics, Inc. 2022 Successor Equity Incentive Plan. As a result, the number of shares of common stock, stock options, warrants, net loss per share, and exercise prices disclosed throughout these notes to the financial statements, as well as the Quarterly Report on Form 10-Q to which these financial statements and notes thereto are attached, have been retrospectively adjusted to reflect the reverse stock split.

Common Stock

The Company is authorized to issue a total of 75,000,000 shares of common stock, par value of $0.001 per share, and 7,500,000 shares of preferred stock, par value $0.001 per share.

Holders of common stock are entitled toone vote for each share of common stock held of record for the election of the Company’s directors and all other matters requiring stockholder action. Holders of common stock will be entitled to receive such dividends, if any, as may be declared from time to time by the Company’s Board in its discretion out of funds legally available therefor.

On January 24, 2023, the Company consummated its initial public offering (“IPO”) and issued 93,333 shares of its common stock at a public offering price of $75.00 per share, generating gross proceeds of $7.0 million and net proceeds of $5.4 million.

In connection with the IPO, on January 19, 2023, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Boustead Securities, LLC, as representative of the underwriters (the “Representative”). Pursuant to the Underwriting Agreement, the Company issued to the underwriters a five-year warrant (the “Representative’s Warrant”) to purchase an aggregate of 5,600 shares of the Company’s common stock, which was equal to six percent (6%) of the shares of common stock sold in the IPO. The Representative’s Warrant has an exercise price of $90.00, which was equal to 120% of the public offering price of the common stock in the IPO.

On July 12, 2023, the Company entered into a securities purchase agreement with an institutional investor (the “Investor Selling Stockholder”) pursuant to which the Company sold to the Investor Selling Stockholder in a private placement (the “Private Placement”) (i) an aggregate of 86,667 shares of common stock (the “Shares”), (ii) in lieu of additional Shares, pre-funded warrants to purchase up to an aggregate of 199,047 shares of common stock (the “Pre-Funded Warrants”), and (iii) accompanying common warrants to purchase up to an aggregate of 285,715 shares of common stock (the “Common Warrants”). The combined purchase price of each Share and accompanying Common Warrants was $26.25. The combined purchase price of each Pre-Funded Warrant and accompanying Common Warrants was $26.25.

The Private Placement closed on July 14, 2023. The Company received aggregate gross proceeds from the Private Placement of approximately $7.5 million before deducting the placement agent commissions and offering expenses payable by the Company. H.C.W. acted as the placement agent in the Private Placement, and as part of its compensation, the Company issued to designees of H.C.W. Placement Agent Warrants to purchase up to 18,571 shares of common stock at an exercise price of $32.81.

Each Pre-Funded Warrant had an exercise price equal to $0.0015 per share. The Pre-Funded Warrants were exercisable at any time after their original issuance and would not expire until exercised in full. Each Common Warrant has an exercise price equal to $26.25 per share. The Common Warrants are exercisable at any time after their original issuance and will expire on January 16, 2029. The exercise price and number of shares of common stock issuable upon exercise of the Common Warrant and Pre-Funded Warrant are subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar events.

During the year ended December 31, 2024, the Company received notice of the exercise of all of the 199,047 Pre-Funded Warrants. As a result of the respective Pre-Funded Warrant exercises, the Company issued 199,047 shares of common stock. As of June 30, 2025, there are no Pre-Funded Warrants outstanding.

The Common Warrants issued in the Private Placement provide that a holder of Common Warrants, as applicable, will not have the right to exercise any portion of its Common Warrants if such holder, together with its affiliates, and any other party whose holdings would be aggregated with those of the holder for purposes of Section 13(d) or Section 16 of the Exchange Act would beneficially own in excess of 4.99% of the number of shares of common stock outstanding immediately after giving effect to such exercise (the “Beneficial Ownership Limitation”); provided, however, that the holder may increase or decrease the Beneficial Ownership Limitation by giving notice to the Company, with any such increase not taking effect until the sixty-first day after such notice is delivered to the Company but not to any percentage in excess of 9.99%. The Common Warrants may be exercised on a cashless basis if a registration statement registering the shares of common stock underlying the Common Warrants is not effective at the time of exercise.

ATM Facility

During the six months ended June 30, 2025, the Company sold 186,294 shares of its common stock through its at-the-market (ATM) facility with H.C.W. These sales were made at a weighted average price of $17.97 per share, resulting in total gross proceeds of approximately $3,348,000 and net proceeds of approximately $3,199,000.

Warrant Inducement

On November 1, 2024, the Company entered into a warrant inducement letter agreement (the “Inducement Agreement”) with a holder of the Company’s warrants to purchase shares of the Company’s common stock, issued in a private placement offering that closed on July 14, 2023 (the “Existing Warrants”). Pursuant to the Inducement Agreement, the holder of the Existing Warrants agreed to exercise for cash the Existing Warrants to purchase up to an aggregate of 285,715 registered shares of common stock, at the adjusted exercise price of $16.50 per share (reduced from the initial exercise price of $26.25 per share).

In consideration of the holder’s agreement to exercise the Existing Warrants at the reduced exercise price per share in accordance with the Inducement Agreement, the Company issued to the holder new unregistered Series A-1 common stock warrants (the “Series A-1 Warrants”) to purchase 285,715 shares of common stock and new unregistered Series A-2 common stock warrants (the “Series A-2 Warrants” and, together with the Series A-1 Warrants, the “New Warrants”) to purchase an aggregate of 285,715 shares of common stock, at an exercise price of $16.50 per share. The Series A-1 Warrants were immediately exercisable for a term offive years from the date of issuance, and the Series A-2 Warrants were immediately exercisable for a term of 18 months from the date that the Company’s registration statement on Form S-3 registering the shares issuable upon exercise of the New Warrants had been declared effective (November 22, 2024) by the SEC. The New Warrants contain customary provisions for anti-dilution adjustments to the exercise price, including stock splits, stock dividends, rights offerings, and pro rata distributions.

On November 4, 2024, the transactions contemplated by the Inducement Agreement closed, and the Company received aggregate gross proceeds of approximately $4.7 million for the exercise of the Existing Warrants, before deducting placement agent fees and other expenses totaling $0.5 million.

H.C.W. acted as the placement agent in the Inducement Agreement, and as part of its compensation, the Company issued to designees of H.C.W. Placement Agent Warrants to purchase up to 18,571 shares of common stock at an exercise price of $20.625. The Placement Agent Warrants expire five years after issuance and contain customary provisions for anti-dilution adjustments to the exercise price, including for stock splits, stock dividends, rights offerings, and pro rata distributions.

The Series A-1 Warrants, Series A-2 Warrants, and Placement Agent Warrants were classified as equity, and the offering costs were recorded as debit to additional paid-in capital.

All of the Company’s outstanding warrants provide that the holder thereof has the right to participate in distributions or dividends paid on the Company’s shares of common stock on an as-converted basis.

Warrant Summary

The following table summarizes the total warrants outstanding at June 30, 2025, all of which are classified as equity:

Issuance of Restricted Common Stock

In October 2024, the Company engaged consultants to perform certain public and investor relations services and issued 50,000 shares of restricted common stock as partial consideration for such services. The Company issued 25,000 shares of fully vested, nonrefundable restricted common stock on October 9, 2024 and the remaining 25,000 shares of restricted common stock were issued on January 8, 2025. On June 29, 2025, the Company issued an additional 10,000 shares of fully vested, nonrefundable restricted common stock, in partial consideration of services performed.

Note 7. Equity-Based Compensation

The Company adopted the Cadrenal Therapeutics, Inc. 2022 Equity Incentive Plan (the “Initial Plan”), on July 11, 2022, which was later amended and restated on October 16, 2022, for purposes of clarifying the application of certain of the rules of the Initial Plan to awards approved before such amendment and restatement of the Initial Plan and to facilitate the transition to the Cadrenal Therapeutics, Inc. 2022 Successor Equity Incentive Plan (the “Successor Plan”) for the issuance and approval of awards after consummation of the IPO. On October 16, 2022, the Board adopted and the Company’s stockholders approved the Cadrenal Therapeutics, Inc. 2022 Successor Equity Incentive Plan (the “2022 Plan”), which is a successor to and continuation of the Initial Plan and became effective on January 19, 2023. Upon the effectiveness of the 2022 Plan, it replaced the Initial Plan, except with respect to awards outstanding under the Initial Plan, and no further awards will be available for grant under the Initial Plan.

Subject to certain adjustments, the maximum number of shares of common stock that initially could have been issued under the Initial Plan and 2022 Plan was initially 133,333 shares. The maximum number of shares of common stock that may be issued under the 2022 Plan initially automatically increased on January 1 of each calendar year for a period of ten years commencing on January 1, 2024 and ending on (and including) January 1, 2033, to a number of shares of common stock equal to 20% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year; provided, however that the board of directors, or the compensation committee, may act prior to January 1 of a given calendar year to provide that the increase for such year will be a lesser number of shares of common stock. On January 1, 2024, the maximum number of shares of common stock that may be issued under the 2022 Plan increased to 173,636. On July 29, 2024, the Company held its 2024 Annual Meeting of Stockholders (the “2024 Annual Meeting”). At the 2024 Annual Meeting, the Company’s stockholders approved an amendment to the 2022 Plan to increase the number of shares of the Company’s common stock that will be available for awards under the 2022 Plan by 133,333 shares to 306,969 shares and to amend the “evergreen provision” such that the number of reserved shares of common stock available for issuance each year will be 20% of: (i) the shares of common stock outstanding at December 31; plus (ii) the shares of common stock issuable upon exercise of warrants and pre-funded warrants outstanding at December 31. As of June 30, 2025,40,019 remained available for future issuance. All available shares may be utilized toward the grant of any award under the 2022 Plan.

Weighted average assumptions used in the Black-Scholes model are set forth below:

Activity under the Plans for the period from December 31, 2024 to June 30, 2025 is set forth below:

The weighted average grant date fair value of options granted during the six months ended June 30, 2025 was $12.93. At June 30, 2025, the Company had $3.2 million of unrecognized equity-based compensation expense related to stock options, which will be recognized over the weighted average remaining requisite service period of 2.35 years. The Company settles employee stock option exercises with newly issued shares of common stock.

Total equity-based compensation expense and the allocation of equity-based compensation for the periods presented below were as follows:

Note 8. Net Loss Per Share

The following table sets forth the computation of the basic and diluted net loss per common share:

Since the Company was in a loss position for the periods presented, basic net loss per share is the same as diluted net loss per share as the inclusion of all potential dilutive securities would have been anti-dilutive. For the periods presented, there were no potential dilutive securities other than stock options and warrants.

The following common stock equivalents were excluded from the calculation of diluted net loss per share applicable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:

Note 9. Subsequent Events

The Company has evaluated events that occurred through August 11, 2025, the date that the financial statements were issued, and determined that there have been no events that have occurred that would require adjustments to its disclosures in the financial statements except for the transactions described below.

From July 1, 2025 through July 14, 2025, the Company sold 39,741 shares of its common stock through its at-the-market (ATM) facility with H.C.W. These sales were made at a weighted average price of $12.97 per share, resulting in total gross proceeds of approximately $516,000 and net proceeds of approximately $499,000.