Monopar Therapeutics

Note1 - Nature of Business and Liquidity

Nature of Business

Monopar Therapeutics Inc. (“Monopar” or the ”Company”) is a clinical-stage biopharmaceutical company focused on developing innovative treatments for cancer patients. Monopar currently has several compounds in development:1) MNPR-101-Zr, a clinical stage uPAR-targeted radiodiagnostic imaging agent;2) MNPR-101-RIT, a late preclinical stage radiotherapeutic for advanced cancers;3) camsirubicin (generic name for MNPR-201, GPX-150; 5-imino-13-deoxydoxorubicin), a Phase1b clinical stage novel analog of doxorubicin engineered specifically to retain anticancer activity while minimizing toxic effects on the heart; and4) an early stage camsirubicin analog, MNPR-202, for various cancers. On* March 27, 2023,the Company discontinued its Validive Phase2b/3* VOICE trial based upon its Data Safety Monitoring Board’s determination that the trial didnot meet the pre-defined threshold for efficacy of a 15% absolute difference in severe oral mucositis prevention between Validive and placebo. The Company continued to record clinical site close-out related expenses for Validive throughout2023. The Company isnot anticipating incurring any license or royalty obligations or incurring any significant expenses beyond2023 related to Validive.

Liquidity

The Company has incurred an accumulated deficit of approximately $60.2 million as of* December 31, 2023* and since inception hasnot generated any revenue. To date, the Company has primarily funded its operations with the net proceeds from the Company’s initial public offering of its common stock on Nasdaq, sales of its common stock in the public market through at-the-market sales agreements, private placements of convertible preferred stock and of common stock and cash provided in the camsirubicin asset purchase transaction. Management estimates that currently available cash will provide sufficient funds to enable the Company to meet its obligations at least through* June 30, 2025.The Company’s ability to fund its future operations, including the continued clinical development of its MNPR-101 radiopharma program and camsirubicin, is dependent upon its ability to execute its business strategy, to obtain additional funding and/or to execute collaborative research agreements. There can beno* certainty that future financing or collaborative research agreements will occur in the amounts required or at a time needed to maintain operations, if at all.

Risks and Uncertainties

The termination of the Company’s Validive clinical trial at the end of* March 2023resulted in a decrease in the Company’s stock price. The closing bid price of the Company’s stock fell below$1.00* for more than30 consecutive trading days, and on* August 28, 2023,the Company received a notice from Nasdaq stating that it is out of compliance with Nasdaq listing standards giving the Company180* days to regain compliance. On* February 27, 2024,the Company was granted asecond* 180-day period to regain compliance; there can beno assurance that the Company will regain compliance within Nasdaq’s extended time limits and requirements. If the Company doesnot regain compliance, the Company would face delisting and it* mayhave serious adverse consequences on the Company’s ability to raise funds, which may*cause Monopar to delay, restructure or otherwise reconsider its operations. If it is necessary to effect a reverse stock split to attempt to cure the bid price deficiency, the impacts on the Company's stock price are uncertain and could be adverse.

Market variables over which the Company hasno control, such as inflation of product costs, higher capital costs, labor rates and fuel, freight and energy costs, as well as geopolitical events could cause the Company to suffer significant increases in its operating and administrative expenses.

The Russia-Ukraine war, and resulting sanctions against Russia and Russian entities or allies, have increased fuel costs and* maycause shipping delays. In addition, the Israel-Hamas war has created additional uncertainties. The broader economic, trade and financial market consequences of these events are uncertain at this time, which mayincrease the cost of supplies for the Company’s clinical materials, maydelay the manufacture of its clinical materials, may*increase costs of other goods and services, or make it more difficult or costly to raise additional financing, any of which could cause an adverse effect on the Company’s clinical and development program and on the Company’s financial condition.

There remains uncertainties as to the long-term impacts of COVID-19 or any potential resurgences thereof. The Company is unable to estimate COVID-19’s or any future pandemic disease's financial impact or duration in light of treatment options and potential surges of new cases from current or future COVID-19 variants or a future pandemic or its potential impact on the Company’s current clinical trial and development programs, including COVID-19’s or a future pandemic's effect on drug candidate manufacturing, shipping, patient recruitment at clinical sites and regulatory agencies around the globe.

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Note2 - Significant Accounting Policies

Basis of Presentation

These consolidated financial statements include the financial results of Monopar Therapeutics Inc., its wholly-owned French subsidiary, Monopar Therapeutics, SARL, and its wholly-owned Australian subsidiary, Monopar Therapeutics Australia Pty Ltd and have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) and include all disclosures required by GAAP for financial reporting. All intercompany accounts have been eliminated. The principal accounting policies applied in the preparation of these consolidated financial statements are set out below and have been consistently applied in all periods presented. The Company has been primarily involved in performing research activities, developing product candidates, and raising capital to support and expand these activities.

The accompanying consolidated financial statements contain all normal, recurring adjustments necessary to present fairly the Company’s consolidated financial position as of* December 31, 2023and2022*, the Company’s consolidated results of operations and comprehensive loss and the Company’s consolidated cash flows for the years ended* December 31, 2023and2022*.

Functional Currency

The Company’s consolidated functional currency is the U.S. Dollar. The Company’s Australian subsidiary and French subsidiary use the Australian Dollar and European Euro, respectively, as their functional currency. At each quarter-end, each foreign subsidiary’s balance sheets are translated into U.S. Dollars based upon the quarter-end exchange rate, while their statements of operations and comprehensive loss and statements of cash flows are translated into U.S. Dollars based upon an average exchange rate during the period.

Comprehensive Loss

Comprehensive loss represents net loss plus any income or lossesnot reported in the consolidated statements of operations and comprehensive loss, such as foreign currency translation gains and losses and unrealized gains and losses on debt security investments that are reflected on the Company’s consolidated statements of stockholders’ equity.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of expenses in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Going Concern Assessment

The Company applies Accounting Standards Codification205-40 (“ASC205-40”),Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which the Financial Accounting Standards Board (“FASB”) issued to provide guidance on determining when and how reporting companies must disclose going concern uncertainties in their financial statements. ASC205-40 requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern withinone year of the date of issuance of the entity’s financial statements (or withinone year after the date on which the financial statements are available to be issued, when applicable). Further, a company must provide certain disclosures if there is “substantial doubt about the entity’s ability to continue as a going concern.” In* March 2024,the Company analyzed its cash requirements at least through June 30, 2025and has determined that, based upon the Company’s current available cash, the Company hasno* substantial doubt about its ability to continue as a going concern.

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Cash Equivalents

The Company considers all highly liquid investments purchased with a maturity ofthree months or less on the date of purchase to be cash equivalents. Cash equivalents as of* December 31, 2023* and2022 consisted oftwo money market accounts and U.S. Treasury Bills.

Investments

The Company considers all of its investments in debt securities (U.S. Government or Agencies), with maturities at the date of purchase fromthree months toone year to be available-for-sale securities. These investments are recorded at fair value with the unrealized gains and losses reflected in accumulated other comprehensive income (loss) on the Company’s consolidated balance sheets. Realized gains and losses from the sale of investments, if any, are determined are recorded net in the consolidated statements of operations and comprehensive loss. The investments selected by the Company have a low level of inherent credit risk given they are issued by the U.S. government and any changes in their fair value are primarily attributable to changes in interest rates and market liquidity. Investments as of* December 31, 2022* consisted of U.S. Treasury Bills with maturities of overthree months toone year.

Prepaid Expenses

Prepayments are expenditures for goods or services before the goods are used or the services are received and are charged to operations as the benefits are realized. Prepaid expenses* mayinclude payments to development collaborators in excess of actual expenses incurred by the collaborator, measured at the end of each reporting period. Prepayments also include insurance premiums, dues and subscriptions and software costs of $10,000 or more per year that are expensed monthly over the life of the contract, which is typicallyone* year. Prepaid expenses are reflected on the Company’s consolidated balance sheets as other current assets.

Leases

Lease agreements are evaluated to determine whether an arrangement is or contains a lease in accordance with ASC842, Leases. Right-of-use lease assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The right-of-use lease asset on the Company’s consolidated balance sheets includes any lease payments made and excludes lease incentives. The incremental borrowing taking into consideration the Company’s credit quality and borrowing rate for similar assets is used in determining the present value of future payments. Lease expense is recorded as general and administrative expenses on the Company’s consolidated statements of operations and comprehensive loss.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents. The Company maintains cash and cash equivalents attwo reputable financial institutions. As of* December 31, 2023*, the balance atone financial institution was in excess of the $250,000 Federal Deposit Insurance Corporation (“FDIC”) insurable limit. The Company hasnot experienced any losses on its deposits since inception and management believes the Company isnot exposed to significant risks with respect to these financial institutions.

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Fair Value of Financial Instruments

For financial instruments consisting of cash and cash equivalents, investments, accounts payable, accrued expenses, and other current liabilities, the carrying amounts are reasonable estimates of fair value due to their relatively short maturities.

The Company adopted ASC820, Fair Value Measurements and Disclosures, as amended, which addresses the measurement of the fair value of financial assets and financial liabilities. Under this standard, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date.

The standard establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources. Unobservable inputs reflect a reporting entity’s pricing an asset or liability developed based on the best information available under the circumstances. The fair value hierarchy consists of the followingthree levels:

Level1** – instrument valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets.

Level2** – instrument valuations are obtained from readily available pricing sources for comparable instruments.

Level3** – instrument valuations are obtained without observable market values and require a high-level of judgment to determine the fair value.

Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each reporting period. There wereno transfers between Level1, 2 or3 of the fair value hierarchy during the years ended* December 31, 2023*, and2022. The following table presents the assets and liabilities recorded that are reported at fair value on the Company's consolidated balance sheets on a recurring basis.No values were recorded in Level2 or Level3 at* December 31, 2023*, and2022.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

(1) Cash equivalents as of* December 31, 2023* and2022 represent the fair value of the Company’s investment intwo money market accounts and U.S. Treasury Bills with maturities at the date of purchase ofthree months or less.

(2) Investments represents the fair value of the Company’s investment in U.S. Treasury Bills with maturities at the date of purchase fromthree months toone year.

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Net Loss per Share

Net loss per share for the years ended* December 31, 2023*, and2022, is calculated by dividing net loss by the weighted-average shares of common stock outstanding during the period. Diluted net loss per share for the years ended* December 31, 2023*, and2022 is calculated by dividing net loss by the weighted-average shares of the sum of a) weighted average common stock outstanding (13,823,951 and 12,718,166 shares for the years ended* December 31, 2023*, and2022, respectively) and b) potentially dilutive shares of common stock (such as stock options and restricted stock units) outstanding during the period. As of* December 31, 2023*, and2022, potentially dilutive securities included stock-based awards to purchase up to 2,527,092 and 1,915,600 shares of the Company’s common stock, respectively. For the years ended* December 31, 2023* and2022, potentially dilutive securities are excluded from the computation of fully diluted net loss per share as their effect is anti-dilutive.

Research and Development Expenses

Research and development (“R&D”) costs are expensed as incurred. Major components of R&D expenses include salaries and benefits paid to the Company’s R&D staff, compensation expenses of G&A personnel performing R&D, fees paid to consultants and to the entities that conduct certain R&D activities on the Company’s behalf and materials and supplies which were used in R&D activities during the reporting period.

Clinical Trials Accruals

The Company accrues and expenses the costs for clinical trial activities performed bythird parties based upon estimates of the percentage of work completed over the life of the individual study in accordance with agreements established with contract research organizations, service providers, and clinical trial sites. The Company estimates the amounts to accrue based upon discussions with internal clinical personnel and external service providers as to progress or stage of completion of trials or services and the agreed upon fee to be paid for such services. Costs of setting up clinical trial sites for participation in the trials are expensed immediately as R&D expenses. Clinical trial site costs related to patient screening and enrollment are accrued as patients are screened/entered into the trial.

Collaborative Agreements

The Company and its collaborative partners are active participants in collaborative agreements and all parties would be exposed to significant risks and rewards depending on the technical and commercial success of the activities. Contractual payments to the other parties in collaboration agreements and costs incurred by the Company when the Company is deemed to be the principal participant for a given transaction are recognized on a gross basis in R&D expenses. Royalties and license payments are recorded as earned.

During the years ended* December 31, 2023*, and2022,no milestones were met, andno royalties were earned, therefore, the Company didnot pay or accrue/expense any license or royalty payments.

Licensing Agreements

The Company has various agreements licensing technology utilized in the development of its product or technology programs. The licenses contain success milestone obligations and royalties on future sales. During the years ended* December 31, 2023*, and2022,no milestones were met, andno royalties were earned, therefore, the Company didnot pay or accrue/expense any license or royalty payments under any of its license agreements.

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Patent Costs

The Company expenses costs relating to issued patents and patent applications, including costs relating to legal, renewal and application fees, as a component of general and administrative expenses in its consolidated statements of operations and comprehensive loss.

Income Taxes

The Company uses an asset and liability approach for accounting for deferred income taxes, which requires recognition of deferred income tax assets and liabilities for the expected future tax consequences of events that have been recognized in its financial statements but havenot been reflected in its taxable income. Estimates and judgments are required in the calculation of certain tax liabilities and in the determination of the recoverability of certain deferred income tax assets, which arise from temporary differences and carryforwards. Deferred income tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets and liabilities are expected to be realized or settled.

The Company regularly assesses the likelihood that its deferred income tax assets will be realized from recoverable income taxes or recovered from future taxable income. To the extent that the Company believes any amounts arenot “more likely thannot” to be realized, the Company records a valuation allowance to reduce the deferred income tax assets. In the event the Company determines that all or part of the net deferred tax assets arenot realizable in the future, an adjustment to the valuation allowance would be charged to earnings in the period such determination is made. Similarly, if the Company subsequently determines deferred income tax assets that were previously determined to be unrealizable are now realizable, the respective valuation allowance would be reversed, resulting in an adjustment to earnings in the period such determination is made.

Internal Revenue Code Sections382 and383 (“Sections382 and383”) limit the use of net operating loss (“NOL”) carryforwards and R&D credits, after an ownership change. To date, the Company hasnot conducted a Section382 or383 study, however, because the Company will continue to raise significant amounts of equity in the coming years, the Company expects that Sections382 and383 will limit the Company’s usage of NOLs and R&D credits in the future.

ASC740, Income Taxes, requires that the tax benefit of net operating losses, temporary differences, and credit carryforwards be recorded as an asset to the extent that management assesses that realization is “more likely thannot.” Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carryforward period. The Company has reviewed the positive and negative evidence relating to the realizability of the deferred tax assets and has concluded that the deferred tax assets arenot “more likely thannot” to be realized. As a result, the Company recorded a full valuation allowance as of* December 31, 2023*, and2022. U.S. Federal R&D tax credits from2016 to2019 were utilized to reduce payroll taxes in future periods and were recorded as other current assets (anticipated to be received within12 months), on the Company’s consolidated balance sheets. The Company intends to maintain the valuation allowance until sufficient evidence exists to support its reversal. The Company regularly reviews its tax positions. For a tax benefit to be recognized, the related tax position must be “more likely thannot” to be sustained upon examination. Any amount recognized is generally the largest benefit that is “more likely thannot” to be realized upon settlement. The Company’s policy is to recognize interest and penalties related to income tax matters as an income tax expense. For the years ended* December 31, 2023*, and2022, the Company didnot have any interest or penalties associated with unrecognized tax benefits.

The Company is subject to U.S. Federal, Illinois and California state income taxes. In addition, the Company is subject to local tax laws of France and Australia. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. Monopar was originally formed as an LLC in* December 2014,then incorporated on December 16, 2015.The Company is subject to U.S. Federal, state and local tax examinations by tax authorities for the tax years2015* through2022. The Company doesnot anticipate significant changes to its current uncertain tax positions through* December 31, 2023*. The Company plans on filing its U.S. Federal and state tax returns for the year ended* December 31, 2023*, prior to the extended filing deadlines in all jurisdictions.

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Stock-Based Compensation

The Company accounts for stock-based compensation arrangements with employees, non-employee directors and consultants using a fair value method, which requires the recognition of compensation expense for costs related to all stock-based awards, including stock option and restricted stock unit (“RSU”) grants. The fair value method requires the Company to estimate the fair value of stock-based payment awards on the date of grant using an option pricing model or the closing stock price on the date of grant in the case of RSUs.

Stock-based compensation expense for awards granted to employees, non-employee directors and consultants are based on the fair value of the underlying instrument calculated using the Black-Scholes option-pricing model on the date of grant for stock options and using the closing stock price on the date of grant for RSUs and recognized as expense on a straight-line basis over the requisite service period, which is the vesting period. Determining the appropriate fair value model and related assumptions requires judgment, including estimating the future stock price volatility and expected terms. For stock options granted in2022, the expected volatility rates are estimated based on the Company’s historical actual volatility over thetwo-year period from its initial public offering on* December 18, 2019through December 31, 2021.For stock options granted in2023,* the expected volatility rates are estimated based on the Company’s historical actual volatility over thethree-year period from its initial public offering on* December 18, 2019through December 31, 2022.Forfeitures only include known forfeitures to-date as the Company accounts for forfeitures as they occur due to a limited history of forfeitures. The expected term for options granted to date is estimated using the simplified method. The Company hasnot* paid dividends and doesnot anticipate paying a cash dividend in the future vesting period and, accordingly, uses an expected dividend yield of zero. The risk-free interest rate is based on the rate of U.S. Treasury securities with maturities consistent with the estimated expected term of the awards.

Recent Accounting Pronouncements

In* October 2023,the FASB issued Accounting Standards Update ("ASU")2023-06, Disclosure Improvements, Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. The ASU incorporates certain U.S. Securities and Exchange Commission (SEC) disclosure requirements and are expected to clarify or improve disclosure and presentation requirements of a variety of Codification Topics, allow users to more easily compare entities subject to the SEC's existing disclosures with those entities that werenot* previously subject to the requirements, and align the requirements in the Codification with the SEC's regulations. The effective date for each amendment will be the date on which the SEC's removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective with early adoption prohibited. For all other entities, the amendments will be effectivetwo years later. In accordance with ASU2023-06, the Company has added Note8 - Loss per Share.

In* December 2023,the FASB issued ASUNo.* 2023-09, Income Taxes (Topic740*): Improvements to Income Tax Disclosures*. The ASU improves income tax disclosure requirements and will require more detailed information on several income tax disclosures, such as income taxes paid and the income tax rate reconciliation table. The standard is effective for public business entities with annual periods beginning after* December 15, 2024,and early adoption is permitted. The Company is currently evaluating the impact of this new standard on its consolidated financial statements and related disclosures. The Company doesnot* expect a material impact to its financial statements based on adoption of this ASU.

Note3 - Investments

As of* December 31, 2023* the Company hadtwo money market accounts and available-for-sale investments with contractual maturities of90 days or less categorized as cash equivalents as follows:

As of* December 31, 2023*, there wereno available-for-sale securities in an unrealized-loss position. There wereno U.S. Treasury Bills classified as Investments on the consolidated balance sheet as of* December 31, 2023.*

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As of* December 31, 2022there wereno available-for-sale securities in an unrealized-loss position and there wereno sales of available-for-sale securities made during2022.* U.S. Treasury Bills classified as Investments on the consolidated balance sheet as of* December 31, 2022*were $4.9 million.

See Note2 for additional discussion regarding the Company’s fair value measurements.

Note4 - Capital Stock

Holders of the common stock are entitled to receive such dividends as* maybe declared by the Board of Directors out of funds legally available therefor. To dateno* dividends have been declared. Upon dissolution and liquidation of the Company, holders of the common stock are entitled to a ratable share of the net assets of the Company remaining after payments to creditors of the Company. The holders of shares of common stock are entitled toone vote per share for the election of each director nominated to the Board andone vote per share on all other matters submitted to a vote of stockholders.

The Company’s amended and restated certificate of incorporation authorizes the Company to issue 40,000,000 shares of common stock with a par value of $0.001 per share.

Sales of Common Stock

On* April 20, 2022,the Company executed a new Capital on Demand™ Sales Agreement with JonesTrading, pursuant to which Monopar mayoffer and sell, from time to time, through or to JonesTrading, as sales agent or principal, shares of Monopar’s common stock. On April 20, 2022,the Company filed a prospectus supplement with the U.S. Securities and Exchange Commission relating to the offer and sale of its common stock from time to time pursuant to the agreement up to an aggregate amount of $4,870,000. Subsequently, the Company filed a new Form S-3, which included therein a prospectus to increase the aggregate amount offered under this agreement to $6,505,642. The Form S-3 was declared effective by the Securities and Exchange Commission on January 4, 2023,at which time the prospectus included therein replaced the prior prospectus supplement. Expenses related to these financing activities were recorded as offering costs (a reduction of additional paid in capital) on the Company’s consolidated statement of stockholders’ equity for the period. During the years ended December 31, 2023*, and2022, the Company sold 1,793,441 and 64,573 shares of its common stock at an average gross price per share of $1.21 and $2.71 for net proceeds of $2,116,435 and $170,552, after fees and commissions of $54,298 and $4,377, respectively. In addition, for the year ended* December 31, 2023,the Company incurred legal, accounting and other fees totaling $43,932 for net proceeds after fees, commissions and expenses of $2,072,503. For the year ended December 31, 2022,*the Company incurred legal, accounting and other fees totaling $83,234 for net proceeds after fees, commissions and expenses of $87,318.

As of* December 31, 2023*, the Company had 14,904,497 shares of common stock issued and outstanding.

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Note5 - Stock Incentive Plan

In* April 2016,the Company’s Board of Directors and stockholders representing a majority of the Company’s outstanding stock at that time, approved the Monopar Therapeutics Inc.2016 Stock Incentive Plan, as amended (the “Plan”), allowing the Company to grant up to an aggregate 700,000 shares of stock-based awards in the form of stock options, restricted stock units, stock appreciation rights and other stock-based awards to employees, non-employee directors and consultants. In October 2017,the Company’s Board of Directors voted to increase the stock award pool to 1,600,000 shares of common stock, which subsequently was approved by the Company’s stockholders. In April 2020,the Company’s Board of Directors voted to increase the stock award pool to 3,100,000 (an increase of 1,500,000 shares of common stock), which was approved by the Company’s stockholders in June 2020.In April 2021,the Company’s Board of Directors voted to approve an amendment to the2016* Stock Incentive Plan to remove certain individual award limits and other provisions related to I.R.C. Section162(m) and to update the limit on Incentive Stock Options tono more that100% of the maximum aggregate number of shares which* maybe granted under the plan, which was approved by the Company’s stockholders in June 2021.In March 2022,the Company’s Board of Directors voted to increase the stock award pool to 5,100,000 (an increase of 2,000,000 shares of common stock), which was approved by the Company’s stockholders in June 2022.*

During the year ended* December 31, 2023*, the Company’s Plan Administrator Committee (with regards to non-officer employees and consultants) and the Company’s Compensation Committee, as ratified by the Board of Directors (in the case of executive officers and non-employee directors), granted to executive officers, non-officer employees, non-employee directors and consultants aggregate stock options for the purchase of 508,902 shares of the Company’s common stock with exercise prices ranging from $2.37 to $3.16 per share which vest over 1 to 4 years. All stock option grants have a 10-year term. In addition, during the year ended* December 31, 2023*, an aggregate 368,345 restricted stock units were granted to executive officers, non-officer employees and non-employee directors which vest over 1 to 4 years.

Under the Plan, the per share exercise price for the shares to be issued upon exercise of an option shall be determined by the Plan Administrator, except that the per share exercise price shall beno less than100% of the fair market value per share on the grant date. Fair market value is the Company’s closing price on Nasdaq. Stock options generally expire after 10 years.

Stock option activity under the Plan was as follows:

(1)508,902 options vest as follows: options to purchase 443,182 shares of the Company’s common stock vest6/48ths on thesix-month anniversary of vesting commencement date and1/48th per month thereafter; options to purchase 55,720 shares of the Company’s common stock vest quarterly overone year; and options to purchase 10,000 shares of the Company’s common stock vest monthly overone year. Exercise prices range from $2.37 to $3.16 per share.

(2) Forfeited options represent unvested shares and vested, expired shares related to employee terminations.

(3) Estimated forfeitures only include known forfeitures to-date as the Company typically accounts for forfeitures as they occur due to a limited history of forfeitures.

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A summary of options outstanding as of* December 31, 2023*, is shown below:

Restricted stock unit activity under the Plan was as follows:

Stock option grants and fair values under the Plan were as follows:

At* December 31, 2023*, the aggregate intrinsic value of outstanding vested stock options was $131,413 (there wereno outstanding unvested stock options that had intrinsic value) and the weighted-average exercise price in aggregate was $4.01 which includes $4.27 for fully vested stock options and $3.37 for stock options expected to vest. At* December 31, 2023*, unamortized balance of stock-based compensation was $2.8 million, to be amortized over the following 2.5 years.

During the years ended* December 31, 2023*, and2022, the Company recognized $1,014,046 and $818,164 of employee, non-employee director and consultant stock-based compensation expense as general and administrative expenses, respectively, and $883,803 and $823,099 as research and development expenses, respectively. The stock-based compensation expense is allocated on a departmental basis, based on the classification of the stock-based award holder.No income tax benefits have been recognized in the consolidated statements of operations and comprehensive loss for stock-based compensation arrangements.

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Note6 - Related Party Transactions

As of* December 31, 2023*, Tactic Pharma, LLC (“Tactic Pharma”), the Company’s initial investor, beneficially owned 29% of Monopar’s common stock and during the year ended* December 31, 2023*, there wereno transactions between Tactic Pharma and Monopar.

None of the related parties discussed in this paragraph received compensation other than market-based salary, market-based stock-based compensation and benefits and performance-based incentive bonus or in the case of non-employee directors, market-rate Board fees and market-rate stock-based compensation. The Company considers the following individuals as related parties: Two of the Company’s board members were also Managing Members of Tactic Pharma as of* December 31, 2023*. Chandler D. Robinson is a Company Co-Founder, Chief Executive Officer, common stockholder, Managing Member of Tactic Pharma, former Manager of the predecessor LLC, Manager of CDR Pharma, LLC and Board member of Monopar as a C Corporation. Michael Brown is a Managing Member of Tactic Pharma (as of* February 1, 2019,withno* voting power as it relates to Monopar), a previous managing member of Monopar as an LLC, common stockholder and Board member of Monopar as a C Corporation.

Note7 – Income Taxes

ASC740, Income Taxes, requires that the tax benefit of net operating losses, temporary differences, and credit carryforwards be recorded as an asset to the extent that management assesses that realization is “more likely thannot.” Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carryforward period. The Company has reviewed the positive and negative evidence relating to the realizability of the deferred tax assets and has concluded that the deferred tax assets arenot “more likely thannot” to be realized. The valuation allowance increased by approximately $2,124,000 and $3,421,000 during the years ended* December 31, 2023*, and2022, respectively.

The provision for income taxes for* December 31, 2023*, and2022, consists of the following:

Total provision for income taxes of $800 for each of the years ended December 31, 2023and2022*, is recorded in general and administrative expenses on the Company’s consolidated statements of operations and comprehensive loss as it isnot considered a material amount.

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The difference between the effective tax rate and the U.S. federal tax rate is as follows (in %):

Deferred tax assets and liabilities consist of the following:

As of* December 31, 2023*, Company had total federal net operating loss carryforwards of approximately $13,548,000, which will begin to expire in2035. Losses generated after2017 will be carried forward indefinitely. At* December 31, 2023*, the Company had state net operating loss carryforwards of approximately $13,578,000 which will begin to expire in2035.

As of* December 31, 2023*, the Company had federal and state tax credits of $1,554,000 and $125,000, respectively. The federal credits expire beginning after the year2035 and the state credits begin to expire in2024.

The Tax Reform Act of1986 limits the use of net operating carryforwards and R&D credits in certain situations where changes occur in the stock ownership of a company. In the event the Company has had a change in ownership, utilization of the carryforwards and R&D credits could be limited. The Company hasnot performed a net operating loss or R&D credit utilization study to date.

The Company accounts for uncertain tax positions in accordance with ASC740-10, “Accounting for Uncertainty in Income Taxes.” ASC740-10 prescribes a comprehensive model for the recognition, measurement, presentation and disclosure in financial statements of any uncertain tax positions that have been taken or are expected to be taken on a tax return. It is Company’s policy to include penalties and interest expense related to income taxes as an income tax expense.

F-18

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

Included in the balance of uncertain tax benefits at* December 31, 2023* are $335,822 of tax benefits that, if recognized, wouldnot impact the effective tax rate as it would be offset by the reversal of related deferred tax assets which are subject to a full valuation allowance. The Company anticipates thatno material amounts of unrecognized tax benefits will be settled within12 months of the reporting date. As of* December 31, 2023*, the Company hadno accrued interest or penalties recorded related to uncertain tax positions.

The Company files U.S. federal, California and Illinois state tax returns. The Company is subject to California state minimum franchise taxes. All tax returns will remain open for examination by the federal and state taxing authorities forthree andfour years, respectively, from the date of utilization of any net operating loss carryforwards or R&D credits. In addition, due to the operations in certain foreign countries, the Company became subject to local tax laws of such countries. Nonetheless, as of* December 31, 2023*, due to the insignificant expenditures in such countries, there wasno material tax effect to the Company’s2023 consolidated financial statements.

On* December 22, 2017,the Tax Cuts and Jobs Act of2017* (“TCJA”) was enacted. On* January 1, 2022,a provision of the TCJA went into effect which requires the capitalization of research and development costs in the year incurred and requires taxpayers to amortize such costs overfive* years and15 years for domestic and foreign expense, respectively. The Company evaluated the impact of the TCJA and prepared the provision by following the treatment of research and development expenditures for tax purposes under Section174.

F-19

**Note8 – Loss per Share **

Basic and diluted net loss per common share was calculated as follows:

Note9–** Commitments and Contingencies**

License, Development and Collaboration Agreements

Pursuant to a non-exclusive license agreement with XOMA Ltd. for the humanization technology used in the development of MNPR-101, the Company is obligated to pay XOMA Ltd. clinical, regulatory and sales milestones which could reach up to $14.925 million if we achieve all milestones for MNPR-101. The agreement doesnot require the payment of sales royalties. There can beno assurance that the Company will achieve any milestones. As of* December 31, 2023,the Company hadnot* reached any milestones and hadnot been required to pay XOMA Ltd. any funds under this license agreement. Thefirst milestone payment is payable uponfirst dosing of a human patient in a Phase2 clinical trial.

Onxeo S.A.

In* June 2016,the Company executed an agreement with Onxeo S.A., a French public company, which gave Monopar the exclusive option to license (on a world-wide exclusive basis) Validive (clonidine hydrocholoride mucobuccal tablet; clonidine HCI MBT) a mucoadhesive tablet of clonidine based on the Lauriad mucoadhesive technology. In September 2017,Monopar exercised the option to license Validive from Onxeo for $1 million. On March 27, 2023,Monopar discontinued its Validive Phase2b/3* VOICE trial based upon the Data Safety Monitoring Board’s determination that the trial didnot meet the pre-defined threshold for efficacy of a15% absolute difference in severe oral mucositis prevention between Validive and placebo. The Company hasnot incurred any license or royalty obligations and the license has been terminated effective* January 2024.*

F-20

Operating Leases

The Company is currently leasing office space for its executive headquarters at1000 Skokie Blvd., in the Village of Wilmette, Illinois for $4,238 per month. In* February 2022,the Company entered into a24*-month lease for 1,202 square feet of the office space for $2,379 per month. In* May 2022,the Company entered into a22*-month lease for939 square feet of additional office space for $1,859 per month.

As of* December 31, 2023*, in accordance with ASC842, Leases, thetwo leases were recorded as an operating lease right-of-use (“ROU”) asset and a lease liability included in accounts payable, accrued expenses and other current liabilities, and non-current operating lease liability on the Company’s consolidated balance sheets. The initial ROU asset and associated liability is equal to the present value of the minimum lease payments. Since the rate implicit in the lease is rarely readily determinable, the Company applied an incremental borrowing rate taking into consideration the Company's credit quality and borrowing rate for similar assets. The lease terms used to calculate the ROU asset and related lease liability doesnot include an option to extend but does include an option to terminate the lease. Lease costs for operating leases are recognized on a straight-line basis over the expected lease term and recorded as general and administrative expenses on the Company’s consolidated statements of operations and comprehensive loss. Amortization of the ROU asset commenced on* April 1, 2022,and June 1, 2022,for thetwo* operating leases, respectively.No ROU asset or lease liability was recorded in2021 as the lease obligation was less thanone year.

The components of lease expense were as follows:

Maturities of the lease liability as of* December 31, 2023* are as follows:

The remaining lease liability will be paid in2024.

F-21

The following table presents the weighted average remaining lease term and the discount rate used in calculating the ROU asset and related lease liability for the periods presented:

Supplemental balance sheet information:

Legal Contingencies

The Company* may*be subject to claims and assessments from time to time in the ordinary course of business.No claims have been asserted to date.

Indemnification

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 indemnification. The Company’s exposure under these agreements is unknown because it involves claims that* maybe made against the Company in the future, but that havenot* yet been made. To date, the Company hasnot paid any claims nor been required to defend any action related to its indemnification obligations. However, the Company* may*record charges in the future as a result of future claims against these indemnification obligations.

In accordance with itssecond amended and restated certificate of incorporation, amended and restated bylaws and the indemnification agreements entered into with each officer and non-employee director, the Company has indemnification obligations to its officers and non-employee directors for certain events or occurrences, subject to certain limits, while they are serving at the Company’s request in such capacities. There have beenno indemnification claims to date.

Note10 - Subsequent Events

From* January 1to March 8, 2024,*under the Company's at-the-market agreement with JonesTrading, the Company sold 2,545,305 shares of its common stock at an average gross price per share of $1.29 for net proceeds of $3,194,310, after fees and commissions of $81,932.